Highlights
- Germany remains heavily dependent on China for rare earth elements, with 65.5% of imports sourced from China in 2024.
- The government has committed €1 billion to a raw materials fund to support domestic processing and reduce import reliance.
- Germany is exploring international partnerships with Australia, Canada, and the US to diversify and secure rare earth supply chains.
Rare Earth Exchanges acknowledges Germany's strategic initiatives to mitigate its reliance on Chinese rare earth elements (REEs), a critical component in the nation's high-tech and defense industries. Despite a slight reduction in dependency, with 65.5% of rare earth imports sourced from China in 2024—a decrease from 69.1% in 2023—Germany's reliance remains significantly above the EU average of 46.3% .
In response to this vulnerability, the German government has committed €1 billion to a raw materials fund aimed at supporting domestic processing capabilities and reducing its dependence on Chinese imports. This investment is part of a broader strategy to secure and diversify rare earth element (REE) imports, promote domestic extraction, and expand recycling capacities within Germany.
Germany
The industrial demand for REEs in Germany reached nearly 6,000 tons in 2023, which was entirely met through imports. Key elements, such as neodymium, yttrium, and scandium, are classified as high-risk due to their concentrated supply, underscoring the urgency for diversification.
Germany's manufacturing sector, with approximately 1.3 million employees engaged in the production of REE-containing goods, contributes €161 billion in value added and €501 billion in production value, highlighting the sector's significant dependence on rare earths as reported by Germany’s Institute for Market Integration and Economic Policy.
To further reduce its dependency, Germany is exploring partnerships with countries such as Australia, Canada, and the United States, aiming to establish more secure and diversified supply chains. Additionally, efforts are underway to identify and develop domestic rare earth element (REE) deposits, particularly in Bavaria, where potential reserves have been estimated.
These measures align with the European Union's Critical Raw Materials Act, which aims to ensure a secure and sustainable supply of critical raw materials, enabling Europe to meet its climate and digital objectives.
Large quantities of rare earth minerals have been discovered and still being discovered in Nigeria. China has been known to monopolize the sector. Germany is not interested in the high quality of deposits in Nigeria.