German giants and Canada to shift the balance in the rare minerals market
It's no secret Europe's been looking for alternative resources for rare earth minerals other than China for a long time. The agreement struck by German auto giants Volkswagen and Mercedes-Benz with the Canadian government is no surprise.
Both pursuing ambitious electrification programs, Volkswagen and Mercedes-Benz will cooperate with Canada for electric-vehicle (EV) battery materials, mainly lithium, nickel and cobalt.
The signing of the memorandum of understanding (MoU) took place in Canada, with the attendance of Canada's Prime Minister Justin Trudeau and Germany's Chancellor Olaf Scholz and Volkswagen Chief Executive Herbert Diess.
The investment in Canada will bolster both companies' European and North American plans, as they have already established other collaborations. Volkswagen and Bosch announced their partnership in January to provide industrial-scale solutions for battery manufacturing in Europe, bolstering the European Battery Alliance (EBA) goal to produce one-third of all global batteries in Europe by 2030.
VW aims to have six gigafactories in Europe by the same year, with a capacity of 240 GWh and a factory in North America. 2030 is also the year Mercedes-Benz plans to go fully electric. Mercedes-Benz expanded its battery agreement with Chinese CATL early this month to secure battery cell supply in Europe.
Canada is expanding its foothold in Greenland
Coming under the spotlight from German giants, Canada is also hastening its investments to become a significant supplier of EV batteries. Canadian Neo Performance Materials has recently announced the acquisition of a rare earth mining project in Greenland from another Canadian company, Hudson Resources.
The acquisition aims to secure minerals needed to produce permanent magnets used in EVs and wind turbines, which Europe increasingly depend on for renewable energy.
According to Reuters, Neo plans to expand its rare-earth business with a rare-earth separation plant in Estonia, which will later grow into a hub in the continent to supply minerals and magnets.
German automakers' move into Canada and Canadian investments in Europe will mutually support the decarbonisation goals of Europe and North America, strengthening Volkswagen and Mercedes-Benz's zero-emission goals.
The main photo shows Volkswagen CEO Diess and Canadian minister Champagne (foreground), German Federal Chancellor Scholz and Canada's Prime Minister Trudeau, courtesy of Volkswagen.