China's crucial role in supplying Germany's metal industry intensifies, as the German military (Bundeswehr) increasingly relies on it.
In the dynamic world of raw materials, the scarcity of germanium has become a significant concern for several countries, particularly Germany and China. China, a major producer of germanium, has seen a dramatic drop in exports to Germany. Imports of raw germanium from China alone fell from over 10 tons in 2022 to just 2.4 tons in 2024, but deliveries have since slightly increased to around 2.7 tons in the first months of 2025. This decrease, coupled with China's export restrictions beginning in 2023, led to a 18.5% drop in imports to Germany, causing supply shortages and threatening the operation of 46 German production lines due to limited availability of critical raw materials like rare earths. The price of germanium per kilogram has skyrocketed as a result, rising to almost $5000, up from around $1000 at the beginning of 2023. Prices in Germany have followed a similar trend, with the cost of raw germanium rising from around €2600 per kilogram in 2022 to over €3800 per kilogram in the first months of 2025. Despite not being a widely used semiconductor in the electronics and digital industry, germanium plays a crucial role in various military and high-tech equipment. Without germanium, the Leopard-2 tank, Puma infantry fighting vehicle, Eurofighter radar systems, drones with high-resolution infrared lenses, and fiber optic cables for secure communication would not function. The armaments industry may be a minor player in terms of germanium quantity, but it is politically indispensable. The "Critical Raw Materials Act", an EU initiative, aims to secure access to critical resources, promote recycling, and form partnerships with third countries. The EU wants to potentially disrupt China's germanium tap, which supplies Germany's largest arms program in decades. Germany imports almost all of its germanium and China dominates the market with approximately 80% of production. Imports from China to the USA have also seen significant reductions. However, new mining projects could provide relief in the medium term in countries like the Democratic Republic of Congo, Canada, and the USA. Exploration projects are also underway in Ireland, Greece, and Peru. The Friedrich Merz (CDU) government views China's dominance in the germanium market as a strategic risk. The Federal Ministry of Economics considers germanium a critical resource, even if it's not one of the largest import items in terms of quantity. In a report by the Financial Times, a "desperate shortage" of global germanium supply was noted in 2023. Beijing could potentially halt germanium exports at any time due to export controls, adding to the strategic risk for countries heavily reliant on this critical resource. Despite these challenges, German Industry is not overly concerned about the germanium shortage. Around 45% of all germanium imports to Germany in 2024 came from China, 23% from Denmark, 15% from South Korea, and 11% from Belgium. This diversification of sources may help mitigate the impact of potential disruptions in the supply chain. In the face of these challenges, efforts are being made to secure a stable supply of germanium and mitigate the risks associated with relying on a single supplier. The EU's "Critical Raw Materials Act" and the exploration of new mining projects around the world are steps in this direction. The global germanium shortage serves as a reminder of the importance of strategic resource management and the need for diversification in the supply chain.
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