(Bloomberg) -- The German government is launching a €1 billion ($1.1 billion) fund for investment in raw materials as it seeks to limit dependency on producers such as China for critical minerals.
“Good news — the raw materials fund is coming,” Franziska Brantner, a deputy economy minister, said Wednesday in a post on X.
“In a time of growing geopolitical uncertainty, it is crucial for Germany to strengthen its resilience in supply chains for critical raw materials,” added Brantner, a member of the Greens, a junior partner in Chancellor Olaf Scholz’s ruling coalition.
Pandemic-triggered supply-chain disruptions and Russia’s invasion of Ukraine exposed the vulnerability of Europe’s reliance on a limited number of trading partners for energy and raw materials for high-tech and green projects.
Brantner’s post confirmed a Bloomberg report published in February on the plans for the fund, which will be overseen by state-owned development bank KfW.
“With the fund, we are investing in equity for projects both at home and abroad — from mining to processing and recycling,” Brantner said.
“In doing so, we are finally taking an urgently needed step that other countries have already successfully embarked on.”
The government and the KfW are aiming to make a decision on where the first investments should be made within the next few weeks, according to a government official, who asked not to be identified as the plans are confidential.
--With assistance from Michael Nienaber.
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