By Sarah Marsh
SANTIAGO DE CHILE, Jan 29 (Reuters) - German Chancellor
Olaf Scholz announced a new, expanded commodities partnership
with Chile on Sunday during a tour of South America that Berlin
hopes will help secure more access to critical minerals key to
the transition to a green economy.
Europe's largest economy has fallen behind in the race for
critical minerals in part due to a distaste for the dirty
business of mining as well as faith in the open market, German
government officials say.
That has led to a reliance on China, which has invested
widely in the mining sector in resource-rich South America and
in processing commodities.
Now though, soaring demand for critical minerals and
geopolitical concerns are sparking a push to better secure and
diversify supply for example through offtake agreements, stakes
in mines or possibly the establishment of Germany's own
processing capacity.
Germany, with its powerful auto industry, is particularly
mindful of securing more lithium, the ultra-light metal key to
making batteries for electric vehicles. Argentina and Chile sit
atop South America's "lithium triangle" which holds the world's
largest trove of the ultra-light battery metal.
The new German-Chilean agreement, which replaces a
decades-old partnership, aims to intensify cooperation in the
sector, for example through an annual bilateral forum and state
instruments to promote trade like investment guarantees.
Given the environmental, labor and social concerns regarding
mining - that have sparked anger and thwarted projects in the
sector - Germany's high standards made it an ideal partner,
Scholz said.
"We want to help Chile on the way to a sustainable mining
sector," Scholz said in a news conference with his Chilean
counterpart in Santiago de Chile on the second leg of his tour.
A new act that came into force this year for example insists
high standards are observed throughout companies' supply chains.
Germany also wanted to ensure mining generated more jobs in the
source countries, Scholz said.
"There is this expression - extractivism - that everything
is just extracted from the earth. But that's not a good thing,
when that's all that happens," Scholz said.
"The question is: can we not ensure that the first round of
processing, that generates hundreds if not thousands of jobs,
can take place in the (source) countries? That would also save
on a lot of transport."
A Bolivian-German lithium joint venture signed in 2018 fell
apart two years later amid domestic political turmoil.
(Reporting by Sarah Marsh; Additional Reporting by Brendan
O'Boyle and Noe Torres; Editing by Christopher Cushing)
Messaging: sarah.marsh.thomsonreuters.com@reuters.net))
