Germany, Canada sign pact to boost projects for EV defence, mineral supply

Germany and Canada have pledged to deepen their partnership in securing supply chains for critical minerals that are vital to both energy and defence technologies.

German Chancellor Friedrich Merz and Canadian Prime Minister Mark Carney held talks in Berlin, during which they discussed a joint initiative that will involve co-funding new projects and expanding on earlier commitments made between the two allies, Caliber.Az reports, citing foreign media.

“For far too long, Canada’s vast reserves of nickel, cobalt, and other key critical minerals have remained underdeveloped, enabling Russia and China to dominate the global market,” Carney said in a prepared statement released by his office.

“Canada is ready to be a dependable supplier for our allies — especially Germany, which is not only Europe’s largest economy but also Canada’s largest trading partner within the European Union,” he added.

A Joint Declaration of Intent signed by the two governments outlines their “mutual intent to innovate, invest, and collaborate through rules-based trade.” It also emphasises that Germany and Canada will work together to mobilise private capital to fund new projects and build resilient, secure supply chains.

Demand for critical minerals — including nickel, cobalt, graphite, and rare earth elements — has surged in recent years, driven by their essential role in technologies such as electric vehicles (EVs), battery storage, renewable energy systems, grid networks, and advanced military equipment. Securing these resources has become a strategic priority for governments worldwide.

The challenge has been compounded by an increasing concentration of mineral production in a limited number of countries and the growing prevalence of export restrictions, according to a May report by the International Energy Agency (IEA).

The situation has been further complicated by US President Donald Trump’s trade policies, which aim to overhaul global trade structures under his “America First” agenda, making it more difficult for governments to ensure stable supplies.

For key resources such as copper, lithium, nickel, cobalt, graphite, and rare earth elements, the IEA reported that the average market share of the top three producing countries rose to 86% last year. Most of the supply growth has been concentrated in just one country per mineral, with Indonesia dominating nickel production and China leading in other critical minerals.

Following his meeting with Merz, Carney is scheduled to engage with leading German business executives to explore investment opportunities and strategies for securing supply chains for energy and natural resources, particularly the critical minerals essential for EV battery production.

Among the executives expected to join the discussions is Markus Schaefer, Chief Technology Officer and Head of Purchasing at Mercedes-Benz Group AG, the Stuttgart-based automaker confirmed.

By Tamilla Hasanova