Germany and Canada have agreed to work together on efforts to extract, refine and recycle critical minerals as they try to reduce dependency on China.
The agreement aims to strengthen supply chains for key minerals such as lithium, copper, tungsten, germanium and rare earth elements, which are vital for products needed in defence, clean technologies and the energy transition. In April, China decided to halt the export of rare earths and magnets, sending automakers and other manufacturers around the world scrambling to find alternatives.
The two countries signed a joint declaration of intent on Tuesday (26 August), at a meeting in Berlin where Canada also announced it would step up its ambitions to become a key supplier of liquified natural gas (LNG) to Europe.
As well as pledging closer collaboration in the critical minerals value chain, with a focus on midstream technologies such as mineral processing, refining and recycling, Canada and Germany agreed to boost commercial partnerships and research ties between companies and financial institutions. While not legally binding, the declaration paves the way for joint projects supported by public and private investment.
“On rare earths, Canada is in a position to develop the only mine-to-magnets complete supply chain outside of China,” said Canada’s energy and natural resources minister Tim Hodgson at the signing, calling the agreement vital for sovereignty and security. German economy minister Katherina Reiche added that stable mineral supply is “key to the competitiveness of our economy.”
Canada is also positioning itself as a long-term supplier of LNG to Europe, which has been looking for alternative sources to Russian energy since the outbreak of the war in Ukraine. In Berlin, Canadian prime minister Mark Carney said his government was “in the process of unleashing half a trillion dollars of investment” in energy, port and intelligence infrastructure to support LNG and hydrogen exports.
He added that the first projects – which could potentially focus on ports in Montreal and Churchill, Manitoba – will be announced within two weeks.
However, there are questions over how much longer Europe will be using LNG as it works to become climate neutral by 2050. Demand for fossil fuels in the European Union has been steadily declining since the 1990s, although they still make up about two-thirds of energy consumption.
Addressing the continued need for LNG imports in Germany, which is aiming to achieve net zero carbon emissions by 2045 – five years earlier than the European Union’s target – Hodgson said, “Germany sees natural gas as a transition fuel”. He noted that Canada hopes to begin shipments to Europe within five years.