Commodities April 20, 2026 06:24 AM

Merz Sees Growth in Brazil’s Critical Metals Supply, Offers German Technology Support

At the Hanover industrial fair, Germany offers know-how as Brazil signals investment in minerals and seeks deeper defence ties

By Nina Shah
Merz Sees Growth in Brazil’s Critical Metals Supply, Offers German Technology Support

Speaking at the Hanover industrial fair on April 20, German Chancellor Friedrich Merz said Brazil has substantial potential to expand deliveries of critical metals used in e-mobility and wind turbines, and that Germany can provide the necessary technology. Brazilian President Luiz Inacio Lula da Silva said Brazil has increased investment in critical minerals and rare earths but will resist arrangements that reduce the country to a raw resource supplier. Lula also said Brazil is pursuing expanded defence cooperation with Germany in areas including tanks, air defence and drones. German-Brazilian government consultations were scheduled to take place later that day.

Key Points

  • Germany offered technological support to help Brazil expand cost-effective extraction of metals used in e-mobility and wind turbines - impacting mining, renewable energy, and automotive supply chains.
  • Brazil has increased investment in critical minerals and rare earths but insists it will not accept arrangements that limit the country to raw resource extraction - affecting negotiation frameworks for mining and export contracts.
  • Brazil is seeking deeper defence cooperation with Germany, discussing tanks, air defence and drones, and pursuing joint projects - relevant for defence manufacturers and related suppliers.

HANOVER, Germany, April 20 - Germany's chancellor highlighted Brazil's capacity to scale up shipments of critical metals while offering German technological support to do so.

At the Hanover industrial fair, Chancellor Friedrich Merz said there are "significant opportunities in the cost-effective extraction of certain metals required for e-mobility and wind turbines." He added that Germany stands ready to supply technological know-how and expertise to broaden bilateral cooperation in those areas.

Speaking alongside Chancellor Merz, Brazilian President Luiz Inacio Lula da Silva confirmed his country has expanded investment in critical minerals and rare earths. Lula cautioned, however, that his government will "not accept any models that reduce our country to mere resource extraction, serving only to meet demand from abroad."

The two leaders also discussed defence cooperation. Lula said Brazil is seeking to "ramp up defence cooperation with Germany" and that officials are "engaged in dialogue regarding strategic areas such as tanks, air defence and drones, as well as joint projects."

Officials from both countries were set to hold German-Brazilian government consultations later on Monday, according to the schedule noted at the event.


Context and market implications

The remarks frame potential collaboration across several industry segments explicitly mentioned by the leaders. The metals and mining sectors, as well as equipment and technology providers for e-mobility and wind turbines, are directly referenced by Merz's comments on extraction and technological support. Defence manufacturers and suppliers are implicated by Lula's reference to tanks, air defence and drones.

Both leaders emphasized different priorities: Merz focused on opportunities to expand extractive output with German technology assistance, while Lula underscored Brazil's insistence on avoiding arrangements that would leave the country solely as a raw-materials provider.

German-Brazilian government consultations were scheduled for later the same day, a procedural next step noted by the participants.


Quoted passages

"There are significant opportunities in the cost-effective extraction of certain metals required for e-mobility and wind turbines," - Germany's chancellor.

"We have expanded our investment in critical minerals and rare earths... we will not accept any models that reduce our country to mere resource extraction, serving only to meet demand from abroad," - Brazil's president.

The exchange at the Hanover industrial fair sets out positions rather than detailed agreements, with formal consultations to follow.

Risks

  • Brazil's refusal to accept models that reduce it to a raw resource supplier may constrain the structure and pace of commercial partnerships in mining and downstream industries.
  • Outcomes remain uncertain pending the German-Brazilian government consultations scheduled for later the same day, leaving the scale and terms of cooperation unspecified.
  • Differences in priorities between technology transfer and sovereign control of resources could complicate negotiations across mining, renewables, and defence sectors.

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