Conflict over Natural Resources

BERLIN/LIMA (Own report) – The Catholic relief organization Misereor is sharply criticizing the new “Raw Materials Partnership” accord, concluded between the Federal Republic of Germany and Peru. Misereor writes that it fears “an aggravation” of the already growing “social conflicts developing around mining projects” in this South American country. This recently signed raw materials treaty grants German companies privileged access to Peru’s resources. The German government has now “signaled the Peruvian government” that “the expansion of the raw materials sector takes priority” over social and ecological regulations affecting that sector. The “raw materials partnership” is one of the measures Berlin is implementing within the framework of its “raw materials strategy” adopted in 2010, to be able to stand its ground in the global competition for access to the most important natural resources – particularly in relationship to China. Peru is an important source of metallic raw materials for Germany. The guarantee of raw materials is more important to Berlin than Misereor’s misgivings.

Important Supplier of Raw Materials

Peru’s importance to the Federal Republic of Germany, as a supplier of natural resources is hardly acknowledged in public discourse, which is usually focused on energy resources, such as oil and natural gas. Peru has the world’s largest silver reserves, is third in copper and zinc deposits, is fourth in lead and is fifth in the world’s tin reserves. For Germany, which is desperately in need of all these resources to nourish its prosperity-bringing industry, Peru is its most important source of silver and copper, accounting respectively for 60 and 24 percent of Germany’s imports. According to a recent analysis published jointly by the German government’s Germany Trade and Invest (gtai), the Federal Agency for Geological Studies and Natural Resources (BGR) and the German-Peruvian Chamber of Industry and Commerce, Peru accounts also for a significant portion of German imports of tin (24%), zinc oxide and zinc peroxide (19%) as well as lead (14%).[1] Its considerable supply and its enormous reserves for the future, makes Peru very important in the eyes of German industry.

China as a Rival

Germany now feels it must take more initiative, particularly because a booming China is strongly intensifying its business connections to Peru and has considerably strengthened its position in the country’s raw materials sector. The People’s Republic of China concluded a free trade agreement with Peru in 2009, and trade and investments have been rapidly growing ever since. Already in 2011, China rose to the status of Peru’s most important trading partner. Its investments, experts estimate, have grown to about US $2 billion in 2012, and the same experts are predicting that within 6 – 7 years, it could grow tenfold.[2] In light of the rapid growth of the Chinese economy, this estimate seems realistic. The People’s Republic of China is particularly expanding its trade in raw materials. Last April, a Chinese corporation bought out the Peruvian Glencore Xtrata Copper Mining Company for US $6 billion. In May, the China National Petroleum Corporation (CNPC) announced that subsequent to the takeover of the Peruvian subsidiary of the Brazilian oil giant (Petrobras), it intends to invest at least 2 billion Euros in the country’s raw materials sector for the next few years.

Germany’s “Raw Materials Strategy”

In October 2010, the German government passed a “Raw Materials Strategy” (german-foreign-policy.com reported [3]) aimed at insuring German industry’s long-term top position on the world market in global competition for raw materials – especially in relationship to China. That strategy also calls for the conclusion of so-called raw material partnerships with important suppliers – contractual accords, to be reached, because they may no longer be relied upon solely through business relations. These agreements have currently been reached with Mongolia and Kazakhstan. They explicitly call for “cooperation between companies of both countries for development, exploitation, processing and use of mineral resources.” Berlin has also concluded a treaty with Chile on cooperation in the exploitation of natural resources, which is also referred to as a “Raw Materials Partnership,” even though it is not quite as extensive.

Full article: Conflict over Natural Resources (German Foreign Policy)

Comments are closed.