Shaping value creation to be ecologically sound and socially just

The new German raw materials policy is tasked with increasing recycling and creating lasting supply security by diversifying supply routes as well as production and processing capacities. And it must ensure that resource-rich countries can benefit from their wealth.

In our capacity as a strong, innovative economy, we have a responsibility to secure our supply of the raw materials that we so urgently need for climate-neutral and digital technologies in an ecologically sound and socially just manner. And we have this responsibility towards the Global South in particular, as it is the Global South that often suffers from the consequences of mining, while most of the value creation takes place outside the resource-rich countries.

Raw materials such as lithium, rare earths and copper must be used as efficiently as possible, recycled or replaced by other materials. This is where the National Circular Economy Strategy (NKWS) and the European Ecodesign Directive are set to come in. The latter should make it possible to establish clear criteria across the EU with regard to the durability, reusability and reparability of products, for example. But one thing is clear nonetheless: for more wind turbines, semiconductors, heat pumps, digital electricity meters – in other words, for the technologies of the future – we will need larger quantities of critical raw materials in Europe and worldwide before recycling can do its part.

Raw material extraction and processing have an impact on the environment and are usually very demanding with regard to energy, time and capital. Decades can pass between the discovery and exploration of a deposit to the industrial use of its raw materials. The long time horizons contribute to the high concentration of power in the raw materials sector. Moreover, countries such as China have staked out strong positions in mining and processing in the past. Chinese companies, some state-owned, others state-supported, have strategically secured mining rights and processing capacities around the world, combining their investments in mining, processing and transportation infrastructure.

Our own strategy must be to increase recycling and create supply security by diversifying supply routes as well as production and processing capacities. At the same time, a natural abundance of metals or minerals must not lead to adverse consequences for the local communities, the environment or the climate. The resource-rich countries must be able to benefit themselves as well, which can be achieved by establishing further steps of the value chain locally in an ecologically and socially just manner.

As a democracy, we thus want to focus more on partnerships in order to create crisis-proof, sustainable and wealth-creating raw material supply chains with more local value creation. Resource-rich countries such as Chile or Mongolia are open to partnerships, to German investment and expertise for environmentally friendly technologies. In Chile, a state-owned Chilean company and a large German corporation have been working together since the beginning of the year to modernize copper production there and make it more environmentally sustainable. Better framework conditions and funding instruments such as a raw materials fund can help our companies diversify and seize opportunities with our partners. Fair trade agreements with countries such as Chile or New Zealand also strengthen a sustainable supply of raw materials.

Here at home, too, we have to show that environmental protection and raw material extraction can go well together. This includes the modernization of the national mining law. New technologies for raw material extraction must be brought to market maturity, so that they can then be incorporated into partnerships for mutual benefit. We are implementing the global standard of the Extractive Industries Transparency Initiative (EITI). More transparent financial flows in the German raw materials sector will send a strong signal internationally, which will also support the fight against corruption in the raw materials sector worldwide.

In times of geopolitical uncertainty and in view of global system competition between democracies and autocracies, it is important to enter into partnerships on an equal footing in order to promote sustainable development in the mutual interest – not least in the raw materials sector.

Franziska Brantner is Parliamentary State Secretary in the German Federal Ministry for Economic Affairs and Climate Action, responsible for foreign trade, European, digital and innovation policy.

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