July 18, 2011 / 12:07 PM / 8 years ago

UPDATE 1-Russia offers Germany help on rare earths supply

* German industry concerned about rare earths supplies

* Russia could be partner on non-energy commodities too

* Germany could offer technology transfer in return

(adds quotes, details)

WOLFSBURG, Germany, July 18 (Reuters) - Russia is offering Germany closer cooperation on rare earths as well as gas and oil supplies, a Russian official said on Monday ahead of an annual bilateral summit in Germany.

Berlin has been trying to improve German industry’s access to the strategic metals, which are used to manufacture a range of high-tech products and whose supply has been hit by export curbs by dominant producer China, among other factors.

Energy has so far dominated German-Russian trade, but Russia also has considerable reserves of rare earths.

“There are very many rare earths deposits on the Kola peninsula,” said Valeri Jasev, president of the Russian Gas Society and deputy head of Russia’s parliament, adding that the two countries could increase cooperation in the area.

The statement came before German Chancellor Angela Merkel was to meet Russian President Dmitry Medvedev on Monday and on Tuesday to discuss deepening ties, with oil and gas cooperation figuring prominently on the agenda.

The metals and their shortage have occupied officials in Berlin, which signed a partnership with resource-rich Kazakhstan in May after months of preparation.

Germany’s electronics industry has said the market for the 17 minerals with magnetic, luminescent and other properties has become critical due to reported restrictions on exports from China, which produces 97 percent of the world’s supply.

“The entire auto industry is now discussing what can be done against the delivery risks or possible market disturbances, which wasn’t the case five years ago,” said Eckhard Schueler-Hanisch, the head of Daimler’s (DAIGn.DE) innovation department.

Russia could become a close partner for Germany in delivering non-energy commodities, the head of the German-Russian commodity forum, Bernhard Kaltefleiter, told Reuters.

“Germany could in turn contribute to promoting the more resourceful use of commodities with a certain technology transfer,” he said.

(Reporting Andreas Rinke and Brian Rohan, Writing by Sarah Marsh, editing by Jane Baird)

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