Industrial espionage is not far away. In order to acquire rare earths, essential in key sectors such as automobiles and defense, German companies are forced to provide strategic information to the Chinese authorities, who have tightened the conditions for exporting these strategic minerals.
According to Bloomberg, the data requested by China is very sensitive and would allow mapping the vulnerability of companies: those that have little inventory or that depend solely on Chinese suppliers.
The very, very detailed forms would require information such as photographs of manufactured components (and the location of minerals), customer details, last year’s production data and projections for the next three years, sources tell Bloomberg.
German manufacturers have no choice, since 95% of the rare earths they use come from China. Who also declared that companies that wanted to accumulate stocks would have their applications rejected and would be de facto suspected of “trafficking” for military purposes.
While the most powerful companies have so far had their export licenses granted, small and medium-sized companies are more affected by the new Chinese rules. Supply chain risk is significant and licensing delays impact production.
The government is left behind
According to Bloomberg, German Chancellor Friedrich Merz insists that this issue is one of his top priorities. “Addictions make us vulnerable to blackmail,” he said in September, adding that it is “fundamental to diversify [les] raw materials supply chains.
However, implementing measures is laborious. Bloomberg reports that companies feel ignored by the government; The main industrial lobby, the BDI, sent a letter to the Minister of Economy this summer requesting a meeting, a letter that went unanswered.
The two sides appear to be at an impasse, with companies reluctant to diversify their supply sources without government compensation, while politicians emphasize that it is up to the private sector to ensure and protect their supply chain.
A spokesperson for the Ministry of Economy also responds that “the objective is to achieve a coordinated European approach.”
The European Union recently sounded the alarm: the European Commission announced that it was working on a plan to free itself from the Chinese monopoly on rare earths. The work program for 2026 published on October 21 foresees several measures in this regard, including the creation of “a center dedicated to these critical raw materials in order to control, jointly purchase and store these minerals.” A Chinese delegation is expected to visit Brussels this week to begin negotiations.
Source: BFM TV
