Germany is taking steps to recycle critical metals and rare earths to reduce its dependence on China, but is finding it difficult to outperform Chinese competition, including in recycling.
Since China announced restrictions on exports of critical minerals and rare earths earlier this year in response to sweeping tariffs on imports from the United States, depleted German stockpiles have been highlighted in local media. One million jobs in the country depend on the availability of these products.
But experts said a pilot recycling project by Freiberger Compound Materials (FCM), a manufacturer of composite semiconductor substrates for microelectronics and optoelectronics, could provide relief to the sector if the government and local industry can provide sufficient support.
FCM recently installed a pilot plant to analyze 500 liters of wastewater per day in order to efficiently extract and enrich minute concentrations of gallium with the help of virus-like organic molecules. Gallium is one of the metals subject to strict export controls in China and is indispensable in the advanced electronics and defense industry.
The technology was developed by the government-linked Freiberg Helmholtz Institute for Resource Technology (HIF), which told Nikkei Asia that it was still too early to talk about concrete results for the industry.
“Long-term cooperation between research institutes, companies and technological development is crucial for innovations in the raw materials sector, as demonstrated by the fact that this specific pilot plant technology took about five years to develop,” said Jens Gotzemer, Director of HIF.
HIF hopes to expand the pilot plant’s technology to include other important materials as well, such as iridium and germanium, which are used in computer processors, aerospace components and radar systems, and which are also subject to Chinese export controls. In recent years, HIF has also developed laser technologies that can detect rare earth elements in scrap metal, as well as technology to recycle rare earth phosphors from LEDs and fluorescent tubes.
While these efforts are in line with a provision in the EU’s Critical Raw Materials Act, which stipulates that 25% of Europe’s critical raw materials supply must consist of recycled materials by 2030, significant hurdles remain to their adoption.
High scrap prices are a frustrating factor. Prices for copper-rich scrap have risen 11.8% year-to-date, reaching €7,940 ($9,165) per ton on November 10, according to Metaloop data.
“Scrap prices in Europe are currently very high as scrap is purchased from Chinese competitors at high prices and then legally exported to China for smelting,” Gutzmer said. “This partly explains why, despite significant advances in recycling capabilities and pilot plants, utilization remains below potential.”
German technology group Heraeus is facing low utilization in the recycling of rare earth magnets. Founded just a year ago, the company told local media in August that its new factory was having difficulties covering costs, despite its strategic potential.
Originally, the plant was supposed to produce about 600 tons of rare earth magnetic powder annually, making it the largest facility of its kind in Europe.
Heraeus declined to give an interview to the Nikkei Asia newspaper, but its public relations director, David Hinkle, wrote in mid-October on his LinkedIn account that he was concerned about Germany and Europe.
“We fail with our eyes wide open, talking about pricing as if that’s the only thing that matters,” Hinkle wrote.
Tradium, one of Germany’s main importers of rare earths, told Nikkei Asia that European recyclers are unable to compete with China’s prices for rare earth raw materials.
In addition to the high costs of obtaining good quality scrap, one of the main problems with recycling is that the quantities installed in each device are usually small, and the magnets are deeply integrated into the systems, making extraction a complex process.
Moreover, Europe is lagging behind in this process. “The time horizon remains the key issue, as most projects will not be able to deliver significant volumes for at least a few years,” said Jan Ghez, senior director of secondary metals and rare earths at Triadium.
“While other countries, such as the United States, Japan and South Korea, have long invested in mining and the value chain, Europe is still at the planning stage in many places. Approval and investment cycles are long and decisions are fragmented.”
HIF’s Gottsmer called on the German government to create a dedicated agency for critical raw materials, citing the Japan Mineral and Energy Security Organization (Jogmec) as an example. Japan faced a shortage of rare earths in 2011 when China imposed restrictions on their exports through the Senkaku Islands, which Beijing claims are the Diaoyu.
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