German Auto Sector Voices REE Concerns

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"REE supply problems, price increases affect our competitive position."

German industrialists are concerned over supplies of rare earth elements (REEs) needed for a wide variety of products after companies said access to the raw materials was restricted by China.

"Supply difficulties or sharp price increases for these metals affect the competitive position of our companies," head of the German auto federation VDA, Matthias Wissmann, told AFP on Monday.

"That is why we need a strong commitment by political leaders in charge of the question to be assured of the raw materials availability," he added.

Klaus Mittelbach of the ZVEI federation of electronic industries said that "development of the market has become critical as a result of restrictions of Chinese exports."

Germany adopted measures last week to ensure industrial groups would have access to such materials, around 97% of which are now produced by China. Two-thirds of the global reserves of REEs. . .are located outside China, however.

The world's leading auto parts group Bosch, which uses some of the elements to make electric motors, said it was "vital to continue to secure the availability" for the next decade. "It is, thus, necessary to tap unexploited reserves" outside China, a Bosch spokesman told AFP, adding: "If the move toward electromobility is not to be delayed, this means investments now."

A Volkswagen spokesman said it 'is watching rare earth markets and trends carefully to be able to react as early as possible if need be.' He said, "If there were to be a shortage for geopolitical reasons, we see ways to compensate in the form of new mining projects in Australia or Vietnam."

The father of Chinese economic reforms once compared China's REEs to Middle Eastern oil, and critics increasingly accuse Beijing of emulating the 12-member OPEC cartel. China has cut REE exports by 5%10% a year since 2006.

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