Germany's Wadephul seeks bigger fund for critical minerals

"China is already there, the United States is just arriving," Wadephul said after meeting his Brazilian counterpart Mauro Vieira in Brasília. "That is why we must not linger too long in the waiting room now, but must forge ahead."

Through its raw materials fund, reportedly worth up to €1 billion ($1.14 billion), the German government intends to participate in extraction projects, either directly or by providing guarantees. These are designed to enable German companies to secure alternative suppliers and reduce their dependence, particularly on China.

Brazil was Wadephul's last stop on a four-day tour that took him to Paraguay, Argentina and Chile, with the EU-Mercosur free trade agreement at the top of the agenda. 

Brazil is Germany's most important trading partner in South America. However, China has been Brazil's largest trading partner since 2009, and the two countries have also been drawing closer politically. 

The South American country has large deposits of critical metals and minerals that are important for the development of future technologies such as renewable energy and electric mobility.

Summing up his trip, the foreign minister praised the Mercosur agreement as a "game-changer," saying the countries "now see a great opportunity in further and closer cooperation." 

The agreement between the European Union and the Mercosur countries of Brazil, Argentina, Paraguay and Uruguay entered into force on a provisional basis in early May. By gradually reducing trade barriers and tariffs, it is intended to boost the exchange of goods and services. 

Wadephul said Germany and Europe must now seize this opportunity, including making sure that the raw materials fund is adequately resourced, "so that we have sufficient financial resources to enable companies to gain access to these raw materials very quickly."