Germany's industrial giants are advancing plans to establish a Japanese-style trading house to secure supplies of critical raw materials, aiming to reduce reliance on China's dominance in rare earths. Companies including carmaker BMW and arms maker Rheinmetall are collaborating with industry lobbies like the VDA and BSDV to develop this model. The initiative involves potential government financial support, with a proposed agency inspired by Japan's Jogmec, which coordinates mineral procurement for the nation's trading houses.

This move comes after China's 2010 rare earth embargo on Japan and recent export controls that highlighted Europe's vulnerability. The German effort seeks to create a centralized entity that would procure critical minerals like lithium for battery production, where domestic European supply is currently limited. The cost of establishing this body is estimated at several hundred million euros, though exact figures remain unclear.

Germany already has a raw materials agency (Dera) but needs reform to meet industry needs, complementing a €1bn KfW fund for new mining projects. While skepticism exists about a centralized EU approach, Germany favors industry-led solutions with government buffering stockpiles. Chancellor Merz discussed the matter with Japanese PM Takaichi, reflecting interest in Japan's model, though direct collaboration with Tokyo is also being considered.

The initiative signals a strategic shift to fortify supply chains against geopolitical risks.