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German Industry Faces Billions in Losses Due to Raw Material Dependency

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The German Industry Association warns of potential losses in the billions due to the country's increasing reliance on imported raw materials, particularly lithium from China, and highlights the need for strategic changes in sourcing and recycling.


German Industry Warns of Billions in Losses Due to Raw Material Dependence

The German Industry Association has issued a stark warning regarding the country's increasing reliance on imported raw materials, which could lead to losses amounting to billions of euros. A study conducted in collaboration with the consulting firm Roland Berger revealed that if exports of lithium from China were to cease, the German economy could face a loss in value added of up to €115 billion (approximately $122.44 billion), representing 15% of its industrial value added.

The automotive sector, which heavily relies on lithium for electric vehicles, is expected to be particularly affected. Siegfried Russwurm, the head of the association, stressed the need for politicians to take proactive measures to avert such a dire scenario. Currently, Germany imports half of its lithium needs from China, a significant increase from just 18% in 2014. China dominates the production of batteries for electric vehicles, raising concerns about Germany and Europe losing their competitive edge in strategically important raw materials.

The study also highlighted that Germany's dependency is not limited to lithium; it is classified as having a 'high' to 'very high' reliance on imports for 23 critical raw materials as of 2023. This includes rare earth elements, most of which are also sourced from China. The authors of the study urged for a reduction in reliance on imports by sourcing raw materials from other countries, enhancing domestic extraction and processing, and developing recycling technologies to create a 'circular economy.'

Potential Labor Strikes Amid Wage Negotiations

In a related development, the German metalworkers' union (IG Metall) has threatened to organize longer warning strikes if the fourth round of wage negotiations in the metal and electrical industries, set to begin in Hamburg, does not yield favorable results. Christiane Benner, the union's first executive, addressed a gathering in Hamburg, stating, "Either we reach an outcome that allows us to navigate this situation well, or we will have to escalate matters to another level and enter into 24-hour warning strikes." The fourth round of negotiations is scheduled to commence later today, with estimates indicating that around 4,000 people participated in the Hamburg rally.

Clam Reports
Refs: | Aljazeera |

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