‘A European answer to the raw materials question’
Lithium, rare earths and stable supply chains are important pillars for the green and digital transformation of the European economy. Kristian Lempa, Director of Global Policy, Governance and Cities at GIZ, explains our role in the supply of raw materials and the advantages of sustainable partnerships.
Mr Lempa, how can GIZ contribute to ensuring that the German economy has a sufficient supply of raw materials during these times of geoeconomic challenges?
The main thing is to find a European solution to meet these challenges. When procuring raw materials, Europe is faced with two tasks that GIZ can help with.
The first task is to encourage German and European companies to make investments in partner countries so that they can expand their processing industries. Here, GIZ can help establish public-private partnerships and secure financing.
The second task involves GIZ working to ensure that our partner countries leverage this expanding raw materials sector to drive their own development. This is part of GIZ’s core business. And only in this way will raw materials partnerships remain stable.
‘We also keep the interests of our partner countries in mind.’
What does that mean exactly and what sets GIZ apart from other actors operating in this area?
We do more than just ensure that our economy has access to important raw materials like lithium or rare earths. We also keep the interests of our partner countries in mind and feel a strong commitment to the global development goals, the SDGs.
The fact of the matter is that many countries do not really benefit from income earned in the raw materials sector. In countries rich in raw materials, public investment in education and health is often lower than in other countries, the political system is less stable and corruption is widespread. These conditions make it very difficult to achieve the SDGs. In addition, countries like this are not reliable partners for European companies. That is why we are working to ensure that financial flows from the raw materials sector are transparent and invested sustainably.
Investment in the training system is an important aspect. This strengthens the local and regional economy and creates prospects for local young people. And foreign investors benefit from this, too.
How are countries with in-demand raw materials reacting to European initiatives like this?
There is a lot of interest in finding a third option for cooperation other than the existing trade relations with China and the USA. Many countries would like to move away from being mere suppliers of unprocessed raw materials. They want to participate in the value chain.
For European companies, especially German companies, this is a very good fit. Germany does not primarily import raw materials, but processed products and intermediate goods. For example, Germany imports 99 per cent of the lithium it needs in the form of batteries. It is strategically important for German industry to procure these intermediate products from various sources in order to free itself from one-sided dependencies.
On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and together with Germany’s Federal Institute for Geosciences and Natural Resources (BGR), GIZ promotes responsible raw materials extraction. Priority areas include:
- Raw materials market analyses
- Good governance (transparency, reduction of corruption risks)
- Social responsibility (corporate due diligence, human rights protection)
- Local economic development
- Geopolitical environment analyses to strengthen European raw materials independence
Partners include initiatives such as the Extractive Industries Transparency Initiative (EITI) and the Global Battery Alliance.
Contact: Tim Schloesser
How does GIZ operate in the raw materials industry?
We are very well positioned to bring together public and private sector actors for public-private partnerships. We know the actors and interests on both sides and have excellent networks in the partner countries and in Europe and Germany.
GIZ is also involved in international initiatives to promote greater transparency, environmental and health protection worldwide. One example is the Global Battery Alliance. It is developing a battery product passport that makes it possible to trace raw materials for batteries right back to the source. German electric car manufacturers will be able to prove that the batteries they use have been produced in compliance with social and ecological standards. At the same time, we are supporting supplier countries in meeting these standards.
What do the projects of the future look like?
Regional cooperation continues to gain in importance for building collaborative value chains. In the Andean region, several countries are already working together to make the mining sector more sustainable. With GIZ’s support they are developing regional standards for extracting and processing lithium, which is a key raw material used in car batteries and energy storage systems. Cooperation arrangements like this could also drive forward efforts in Africa: in the development of common standards, the expansion of infrastructure or the removal of trade barriers. The Democratic Republic of the Congo, Zambia and other countries in the region have raw materials that are required for batteries. Together they could become an important pillar for the electrification of the European economy.
On behalf of the German Government, the European Union, and the private sector, GIZ has a broad portfolio that supports the responsible and fair extraction of raw materials:
- For raw materials extraction, the producing countries and the private sector must work together. CONNEX supports governments in the Global South during negotiations. Contact: Brigitte Klein
- In the Great Lakes region in Eastern Africa, a project brings countries together to improve transboundary raw materials extraction and strengthen the involvement of the local population. Contact: Mamadou Diarrassouba
- The Democratic Republic of the Congo is rich in raw materials but the situation for many people remains precarious.
- In three provinces GIZ works to ensure that civil society and especially women are more closely involved in local decision-making. Contact: Herminie Delanne
- At the same time, another project focuses on improving state and private sector cooperation and strengthens the public administration so that income generated from the mining sector can be used for local development efforts. Contact: Magnus Schmid
- GIZ International Services is improving conditions of around 200.000 workers in the artisanal mining of copper and cobalt. Cobalt 4 development supports health, safety and environmental standards and is driving the integration in responsible value chains. Funded by private sector companies, the project is cofinanced by the EU. Contact: Nikolaus McLachlan
