Germany wants to set up critical resource fund

The German government is planning to set up a sovereign wealth fund worth up to 2.2 billion euros to finance the mining and production of critical raw materials for electric car batteries.

According to a Bloomberg report, citing insiders, the new commodity fund could be launched as early as next year if the coalition can agree on providing the necessary funds. A spokesperson for the German Federal Ministry of Economics confirmed that they are working on a “raw materials fund to promote raw materials projects at home and abroad”. The ongoing conflict in Ukraine had “made it clear how dependent Germany was on Russia for natural gas”. Germany also wants to be less dependent on China for resources.

In addition to Economics Minister Robert Habeck,  Germany’s Chancellor Olaf Scholz also supports the plans for the fund. Finance Minister Christian Lindner and his political party FDP, however, would still have to be convinced. He told reporters that his ministry knew nothing of the plans. The party had also recently derailed the European Union discussion on the banning of internal combustion engines by insisting that eFuels be allowed and subsidized. A compromise was found shortly after, however, the ban was immensely softened.

Due to the high costs and the complex approval procedures, European mining companies recently demanded more political support. VW had also recently called for quick solutions. Thomas Schmall, VW’s chief technology officer and head of the components division responsible for battery cell production, wrote that VW was making “much faster progress” on plans for a battery factory in North America than in Europe after a top-level meeting in Brussels in March. Europe risks losing “billions of investments to be decided in the coming months and years”, he added, calling for a European state aid programme and lower prices for green energy. “Above all, we need haste,” Schmall continued. “The IRA is in place and already delivering results.”

bloomberg.com (paywall), yahoo.com