Germany Unveils €1 Billion Fund to Secure Critical Raw Materials

Germany establishes a €1 billion fund to secure critical raw materials, reducing reliance on China and strengthening supply chain resilience.

Editorial Team (ET)July 1, 2025

Germany has taken a bold step towards securing its future in global supply chains by launching a €1 billion ($1.1 billion) raw materials fund. This fund is part of a broader strategy aimed at limiting the country's dependence on foreign producers, such as China, for critical minerals needed in high-tech industries and green projects.

Why the Raw Materials Fund is Important

In recent years, geopolitical tensions and supply chain vulnerabilities have shown that reliance on a limited number of suppliers can leave countries exposed to significant risks. The global pandemic and Russia’s invasion of Ukraine disrupted energy and raw material supplies, leaving many European nations scrambling to secure critical components for their economies. Germany's raw materials fund comes as part of a larger effort to mitigate these risks and enhance its strategic autonomy. As the world shifts toward cleaner energy and more technologically advanced industries, access to critical minerals becomes increasingly important.

Germany’s Response to Supply Chain Disruptions

The pandemic triggered widespread supply-chain disruptions, highlighting Europe’s over-reliance on key trading partners. Russia’s invasion of Ukraine further exacerbated these issues, making it evident that Germany could not afford to remain dependent on a few suppliers for vital resources. This fund is an answer to those challenges, positioning Germany as a more self-sufficient player in the global economy.

The Role of Critical Minerals in the Modern Economy

Critical minerals like lithium, cobalt, and rare earth elements are essential for a range of high-tech applications, from smartphones to electric vehicles. They are also pivotal to the development of renewable energy technologies, such as solar panels and wind turbines. Germany’s commitment to a green economy requires a steady supply of these materials. By creating a raw materials fund, Germany aims to secure access to these resources while also supporting sustainable practices, from extraction to processing and recycling.

Germany’s Fund for Raw Materials

The announcement of the €1 billion fund was a major milestone in Germany’s efforts to enhance its supply chain resilience. The fund will invest in both domestic and international projects, focusing on critical areas such as mining, processing, and recycling.

State-Owned Development Bank KfW to Oversee the Fund

The responsibility of managing the fund falls to KfW, Germany’s state-owned development bank. With a solid track record of managing public investments, KfW is expected to play a crucial role in determining where the initial investments should be made, both within Germany and in strategic locations abroad.

Deputy Economy Minister’s Statements

Franziska Brantner, Germany’s deputy economy minister, confirmed the government’s commitment to this initiative in a recent post on X (formerly Twitter). Brantner emphasized the need for supply chain resilience in an era of geopolitical uncertainty, stressing that the fund will be a key tool in achieving this goal.

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