German Chancellor Olaf Scholz announced a new expanded commodity partnership with Chile on Sunday, during a tour of South America that Berlin hopes will help secure greater access to critical minerals key to the transition to a green economy.
Europe’s biggest economy has lagged behind in the race for critical minerals partly because of dislike for the environmental implications of the mining business, as well as faith in the open market, German government officials say.
That has led to reliance on China, which has invested heavily in resource-rich South America’s mining sector and commodity processing.
Now, however, growing demand for critical minerals and geopolitical concerns are creating momentum to better secure and diversify supply.
Germany, with its powerful auto industry, is especially concerned about getting more lithium, the ultra-light metal key to making batteries for electric vehicles.
Argentina and Chile are at the top of the “lithium triangle” from South America, which contains the world’s greatest treasure trove of metal.
The new German-Chilean agreement, which replaces a decades-long partnership, aims to intensify cooperation in the sector.
“We want to help Chile on the path towards a sustainable mining sector”, Scholz said at a press conference in Santiago de Chile on the second leg of his tour of the region.
Germany also wants to make sure that mining creates more jobs in the countries of origin, the official said.
“There is this expression, extractivism, that everything is extracted from the earth. But that’s not a good thing, when that’s all that happens”, he added.
“The question is: can we not ensure that the first round of processing, which generates hundreds, if not thousands of jobs, can take place in the (originating) countries? That would also save a lot of transportation“, held.
A Bolivian-German lithium joint venture formed in 2018 collapsed two years later amid local political turmoil.
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