Raw Materials: Germany and Mongolia Enter Strategic Partnership

by | 7. Feb 2024 - 11:09 | Politics

The countries want to work more closely together on critical minerals and reduce their respective dependence on China.

Germany and Mongolia seek to enter a strategic partnership and cooperate more closely in raw materials and mining-related areas. The Central Asian country’s great potential for wind and solar energy is also to be exploited to a greater extent. The signing of a corresponding agreement is planned for Wednesday during the visit of German President Frank-Walter Steinmeier to the Mongolian capital, Ulaanbaatar, as reported in advance by Reuters. The official occasion for the state visit is the 50th anniversary of diplomatic relations between the two countries.

A raw materials agreement was concluded with Mongolia in 2011 under former German Chancellor Angela Merkel. In 2022, the current Federal Chancellor, Olaf Scholz, reaffirmed the intention of closer cooperation during the Mongolian Prime Minister’s visit to Germany (we reported). Germany aims to reduce one-sided economic dependencies, particularly on Russia and China. For its part, Mongolia – as a landlocked country between the two major raw material powers – wants to diversify its political and economic relations. Cooperations with the U.S. and France were initiated last year.

Massive Investments Needed

Mining is already an important economic factor in resource-rich Mongolia (PDF), with copper, gold, and iron being mined on a large scale alongside coal. The country also has significant deposits of rare earths. However, mining these raw materials could only become economically viable in the long term, at least according to a joint study (PDF) by the Mongolian Mineral Resources Authority and the German Federal Institute for Geosciences and Natural Resources. Further exploration efforts and huge investments are required, especially if the minerals are to be processed in Mongolia in the future instead of in China, which has a quasi-monopoly in this sector. Accordingly, Mongolia has been courting foreign investment in its raw materials industry for some time. The desert and steppe state also relies on international cooperation, for example, with South Korea and neighboring China, to build up the necessary technical expertise.

Photo: iStock/Oleksii Liskonih

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