The German government’s Raw Materials Fund is officially moving forward, as announced by the Federal Ministry for Economic Affairs and Climate Action (BMWK). With a budget of one billion euros, the fund aims to enhance the security of raw material supplies in Germany and Europe through initiatives related to extraction, processing, or recycling. Applications are now open to the state development bank, Kreditanstalt für Wiederaufbau (KfW), which will oversee projects both domestically and internationally.
Only raw materials classified as critical or strategic under the EU’s Critical Raw Materials Act (CRMA) are eligible for funding. These materials are crucial for green and digital technologies, as well as the defense sector, and the BMWK anticipates potential future shortages, exacerbated by heavy reliance on specific countries for imports.
The financing model for the fund will include diverse instruments, particularly equity. Individual projects may receive funding between 50 and 150 million euros. KfW, in conjunction with the German Raw Materials Agency (DERA), is expected to shortlist projects soon for federal government review.
Despite the importance of securing raw materials for Germany’s competitiveness, the fund’s launch faced uncertainties. A study from the German Economic Institute (IW) emphasized the need for swift results from both EU and German initiatives, especially as German investments in foreign mining companies have significantly declined over the last decade. IW also raised concerns about the fund’s financial capacity, noting that other countries like France and Italy have allocated more than double the amount for similar initiatives.
