Germany’s industrial sector is increasingly exploring a coordinated strategy to secure critical minerals, reflecting growing concern that access to essential raw materials is becoming one of the most decisive factors shaping the energy transition, technological development, and modern defense production.
Major German manufacturers, industry associations, and policymakers are discussing the creation of a system inspired by Japan’s long-established trading-house model. Under this approach, leading companies would collaborate through a specialized procurement and investment platform designed to secure upstream access to strategic minerals through long-term supply agreements, joint purchasing programs, and equity investments in mining projects.
The initiative highlights mounting concerns across Europe that the current approach to critical raw materials policy—largely focused on regulatory reforms and permitting improvements—may not be sufficient to guarantee reliable supply chains in a rapidly tightening global commodities market. For Germany’s industrial leaders, the Japanese model offers a practical example of how strategic policy objectives can be transformed into real-world supply networks capable of supporting long-term industrial competitiveness.
Critical Minerals: The Backbone of Modern Industry
The urgency of Germany’s new approach reflects the increasingly vital role that critical minerals play in modern economic systems. Materials such as lithium, nickel, rare earth elements, graphite, and gallium are now indispensable across a wide range of high-tech sectors. These include electric vehicles, renewable energy infrastructure, semiconductor manufacturing, advanced electronics, and defense technologies.
Europe’s dependence on foreign supply chains has become a major concern. A large portion of the world’s mineral processing capacity is concentrated in China, which dominates several critical stages of the global supply chain.
China currently controls around 85–90% of rare earth processing capacity, roughly 60–70% of lithium refining, and a significant share of graphite and battery-material production.
For Europe—and especially for Germany’s powerful manufacturing economy—this level of concentration represents a strategic vulnerability. Germany’s economic strength depends heavily on industries that require stable access to these resources. The automotive sector, one of the country’s most important industries, consumes large quantities of rare earth magnets used in electric vehicle motors.
Defense manufacturers also depend on specialized minerals for high-precision electronics, sensors, and guidance systems, while the renewable energy sector requires rare earth magnets for wind turbines and other clean-energy technologies. As a result, German industry leaders increasingly view raw materials security as a key pillar of industrial competitiveness.
Japan’s Supply-Chain Strategy as a Model
Japan’s experience over the past decade and a half has become an important reference point for European policymakers seeking to strengthen mineral supply chains. In 2010, tensions between Japan and China escalated into a diplomatic dispute that led Beijing to temporarily restrict rare earth exports to Japan. The episode exposed how vulnerable Japan’s advanced manufacturing industries were to disruptions in mineral supply.
In response, the Japanese government launched a strategic effort to diversify its access to critical materials. A central role in this effort was played by the Japan Organization for Metals and Energy Security (JOGMEC), a government-backed institution that provides financial support and risk-sharing mechanisms for overseas mining investments.
At the same time, powerful Japanese trading companies—including Mitsubishi Corporation, Sumitomo Corporation, and Itochu—expanded their role in global mineral supply chains. These firms invested in mining projects, resource exploration, and mineral processing operations, while negotiating long-term offtake agreements that guaranteed stable supplies for Japanese manufacturers.
Over time, Japan successfully diversified its supply sources and reduced its dependence on Chinese rare earth imports by establishing partnerships with countries such as Australia, Vietnam, and India. For German industrial planners, this coordinated system provides a compelling model for strengthening Europe’s resource security.
German Industry Takes the Lead
The push to explore a Japanese-style supply strategy in Germany is being driven primarily by industrial stakeholders rather than European institutions. Large manufacturing companies across sectors—including automotive engineering, defense production, and industrial technology—have expressed interest in creating a joint procurement platform capable of negotiating supply agreements and investing directly in mining and refining projects.
Automotive manufacturers such as BMW have been particularly vocal about the need for stronger alignment between industrial demand and upstream resource investment, especially as electric vehicle production expands. Similarly, defense contractors such as Rheinmetall have shown interest in mechanisms that could provide greater certainty of supply for specialized materials required in advanced military technologies.
German industry associations argue that a more proactive approach is necessary—one that combines state-supported financing, aggregated private-sector demand, and strategic international partnerships.
Europe’s Regulatory Framework for Critical Minerals
Germany’s discussion is unfolding alongside the European Union’s broader strategy to strengthen raw material supply chains. The Critical Raw Materials Act (CRMA) is a cornerstone of the EU’s industrial policy aimed at reducing dependence on external suppliers while building more resilient supply networks.
Under the legislation, the EU aims to achieve several targets by 2030:
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10% of strategic raw materials consumed in Europe should be mined within the EU
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40% should be processed domestically
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25% should come from recycling
In addition, the EU aims to ensure that no more than 65% of any strategic mineral supply comes from a single third country. Despite these ambitions, many industrial leaders argue that regulatory targets alone may not create supply chains quickly enough to meet rising demand.
New mines and processing facilities often take 10 to 15 years to develop, while demand for key minerals used in batteries and permanent magnets is expected to surge well before 2035. This mismatch between demand growth and supply development has prompted German industry to look for faster, market-based solutions.
Explosive Demand Driven by the Energy Transition
Forecasts for mineral demand help explain why supply security has become such a pressing concern. According to projections from the International Energy Agency, global demand for lithium used in battery technology could rise by more than 400% by 2040 under net-zero climate scenarios.
Demand for rare earth elements used in permanent magnets, essential for electric motors and wind turbines, could triple during the same period. Graphite demand for battery anodes could surge by 600–700% by 2040. Europe’s industrial structure places it directly in the path of this growing demand.
Germany alone produced over four million vehicles annually before the pandemic, and the country’s automotive sector is rapidly transitioning toward electric mobility. Electric vehicles require significantly larger quantities of critical minerals compared with conventional cars.
At the same time, Europe’s expansion of wind energy capacity is increasing demand for high-efficiency generators that rely on rare earth magnet technologies. These developments have pushed raw materials supply chains to the center of industrial policy debates across Europe.
Financing Mining and Resource Development
One of the major advantages of Japan’s trading-house model is its ability to combine industrial demand, financing, and commodity trading within a single coordinated system. Japanese trading companies act as financial intermediaries capable of supporting mining projects through equity investments, project loans, and long-term offtake agreements. This structure reduces financial risk for project developers while guaranteeing reliable supply for industrial customers. Germany currently lacks a comparable framework.
European companies have traditionally pursued mineral supply contracts individually, resulting in fragmented investment strategies and limited influence over upstream mining operations. German industry leaders believe that a dedicated procurement and investment platform could help bridge this gap by pooling demand from multiple manufacturers and providing financial support for new mining and processing projects. Such investments could target resource-rich regions including Australia, Canada, Africa, and South America.
Intensifying Global Competition for Resources
Germany’s new approach also reflects rising geopolitical competition for critical minerals. China remains the dominant force in many processing sectors, while the United States has launched large-scale initiatives to strengthen domestic mineral supply chains through subsidies and industrial policies linked to the Inflation Reduction Act.
Japan has already secured long-term supply partnerships with mining projects across several continents. Without stronger coordination, European manufacturers risk being caught between competing resource strategies implemented by other major economic powers. German industry leaders increasingly see coordinated procurement and investment as a way to ensure that European companies remain competitive in the global race for strategic resources.
The Future of Europe’s Raw Materials Strategy
Although the concept of a German critical-minerals procurement platform remains in the early stages of discussion, it reflects a broader transformation in Europe’s thinking about resource security. Raw materials policy is no longer viewed solely through the lens of environmental regulation or mining permits. Instead, it is increasingly seen as a crucial component of industrial strategy, technological leadership, and energy security.
Germany’s interest in adapting the Japanese trading-house model signals a shift toward more proactive supply-chain management—one that combines government support, industrial cooperation, and global resource partnerships. As the global energy transition accelerates, countries capable of building resilient and diversified mineral supply networks will gain a decisive advantage in the industries shaping the future global economy.
Germany’s evolving strategy suggests that Europe’s largest industrial power is beginning to recognize a new economic reality: securing the raw materials of the future will require not only regulation but also innovative industrial structures capable of competing in an increasingly resource-constrained world.
