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Germany jumps into the race for rare earths

In line with the country’s recent policy shift towards a more active role in the global race for critical mineral resources, a German mining and commodity group has announced its plans to develop a 38,000 tonnes deposit of REEs in the East German state of Saxony.  A newly formed company called Seltenerden Storkwitz AG, which to-date has received 2.2. million Euros from German investors, will kick off drilling operations in the spring of 2012.

According to the company’s CEO, the German government has been extremely supportive of the project in the context of its new mineral commodity strategy, the implementation of which has been made a priority in spite of the fact that the political agenda remains dominated by the Eurozone crisis.

Chancellor Merkel, after inking a cooperative REE development treaty with Mongolia, has traveled to resource-rich Angola and Nigeria, and is expected to sign a raw materials deal with Kazakhstan, a country known for vast deposits of manganese, tungsten, copper and molybdenum.  Additional cooperative agreements will likely be sought with South Africa, Peru, and Chile.

Meanwhile, the formation of a “globally active profit-oriented raw materials corporation,” called the “Alliance for Securing Raw Materials,” has been kicked into high-gear – with the support of the German government, and Merkel as the “door opener” to leaders in resource-rich countries.

With resource prices remaining high and supply crunches reverberating in many areas, we can expect to see other countries and industry groupings undertake similar efforts. The big question for U.S. policy makers is: Are we aware of our own resource needs (and potential for that matter) and ready to act accordingly?