German-Russian Raw Materials Conference against sanctions against Russia

The Russian Deputy Prime Minister, the manager of Gazprom and the former Metro manager Dr. Eckhard Cordes were among the high-profile speakers. The former Bavarian Minister-President Dr. Edmund Stoiber was also present. All parties agreed that Germany cannot afford economic sanctions against Russia.

Protesting against economic sanctions against Russia: Members of the small German political party “BüSo Bürgerrechtsbewegung Solidarität” (Civil Rights Movement Solidarity party).

On Wednesday, April 2, 2014, countless high-cablibre representatives from both German and Russian politics, economics as well as science have come together for the 7th German-Russian Raw Materials Conference in Dresden’s International Congress Center.

In the margins, the conference was also a platform for demonstrations, for example by the German political party BüSo "Bürgerrechtsbewegung Solidarität" (bueso.de), in English Civil Rights Movement Solidarity. In front of the Congress Center, they protested with posters against economic sanctions against Russia. The demonstrators said that this will lead to war in the medium term.

The Raw Materials Conference (Russian: 7-ая Российско-Германская сырьевая конференция) was held under the patronage of the former German Federal Minister for the Environment and former Under Secretary General of the United Nations, Prof Dr Klaus Töpfer (Russian: Проф. др. Клаус Тёпфер). Prof Dr Vladimir Litvinenko (Проф. др. Владимир Литвиненко) also acted as patron for the conference and currently holds the position of rector at the National Mineral Resources University “Gorny” in St. Petersburg (Ректор Национального минерально-сырьевого университета «Горный», Санкт-Петербург).

Töpfer, one of the most well-known faces in German politics, was the contact person for countless different interest groups during the entire German-Russian Raw Materials Forum.

Campaign for a good political and economic relationship between Germany and Russia during the Raw Materials Conference: the former German Federal Minister for the Environment Prof. Dr. Klaus Töpfer (member of the CDU) and former yearlong Minister-president of Bavaria Dr. Edmund Stoiber (member of the CSU).

The same holds true for Dr. Edmund Stoiber (Др. Эдмунд Штойбер) who, however, acted more in the background than Töpfer. In 2002, Stoiber was a candidate for the conservative parties CDU/CSU for the position of Federal Chancellor and had previously worked very successfully as Minister-President of the Free State of Bavaria for many years. He is currently working mainly in Brussels and actively and intensively works on a good East-West relationship between Germany, the EU and Russia.

The first conference day of the German-Russian Raw Materal Forum on Wednesday, April 2, 2014, was opened by the Saxonian Minister-president Stanislaw Tillich (Станислав Тиллих). He demonstrated the importance of raw materials using a simple comparison: One needs to realise that, in 1970, the average car weighed 900 kilograms (roughly 1,990 pounds).

Today, in the year of 2014, the weight of the average car is 1,500 kilograms (roughly 3,300 pounds), he said. He pointed out that, on top of that, the number of cars has doubled within the last 40 years and the world’s resources are limited. That is why, he continued, that conversation especially between Germany and Russia is so important, primarily because Germany quite simply has hardly any resources at its disposal, Russia, however, does.

According to Tillich, it is also essential to constantly exchange knowledge between Russia and Germany regarding the recovery of resources. That is why he particularly appreciates that Russian students study at Germany’s top educational institution for mining, the Technical University Bergakademie Freiberg, and vice versa German students studying at the Russian counterpart, the State Mining Institute and Technical University St. Petersburg. Lignite, gas and photovoltaics are the most important resources for the future regarding the generation of energy, said Tillich. That is why, he continued, he cannot understand why, for example, brown coal mining in North Rhine-Westphalia was simply stopped.

"Some are looking for a political tsunami against Russia"

The significance of the economic relationship between Germany and Russia were also an important topic for the Russian ambassador in Germany, Vladimir Mikhailovitch Grinin (Владимир Михайлович Гринин). He said that it is very good and very important that the Raw Materials Conference takes place despite the current political debate. For Vladimir Grinin, one could feel very distinctly how some forces were working towards an escalation of the political discords around Crimea and the Ukraine to a political tsunami.

That is why, he explained, the 7th German-Russian Raw Materials Conference (April 1-3, 2014) currently taking place at the International Congress Center in Dresden is a good and important signal that the very tight bond regarding resources between Russia and Germany which has existed for decades does not break.

Attendees of the German-Russian Raw Material Conference in Dresden: despite the political sabre-rattling, 340 representatives from German and Russian politics, economics and science took part.

He continued: whoever tried to do politics using economic sanctions had to realise that this is not a zero sum game for anyone – it would hit both Germany and Russia. He pointed out that first and foremost, however, it is about energy security for Europe where Russia has been a reliable partner for Germany as well as Europe – for decades.

At the same time, the Russian ambassador made it clear that the EU headquarters in Brussels should not be mistaken about one thing: Europe is not the centre of power in the world anymore. The old continent, he continued, should be careful that it does not get left behind in the worldwide play of forces if it doesn’t constructively contribute to it. Russia, he says, has an interest in a strong humanitarian economic zone from the Atlantic to the Pacific Ocean.

This was also pointed out by the Russian Deputy Prime Minister who travelled specifically for the conference from Moskow to Dresden. Arkadi Dvorkovich (Аркадий Дворкович) said it was very important for Russia to have a very good relationship with Germany and with the EU but that Russia is increasingly nurturing intensive relationships with other power centres of the world.

Deputy Russian Prime Minister gives almost 1 million Euros for scientific purposes in Dresden

During the current crisis, said Arkadi Dvorkovich, it was very good that not just one but two Russian governors came to the German-Russian Raw Materials Conference in Dresden. He continued that this helped a lot to stay in conversation regarding the very important question of energy and to maintain the good relationship between Russia and Germany. For Dvorkovich, it was about the understanding that the people’s interest in both countries is even more important than the political interest. He pointed out that no matter how aggressive the political steps were, at the end of the day it is the people who decide about the relationships between countries.

However, politics would have to assume a huge responsibility for the energy security of the world, the Deputy Prime Minister Arkadi Dvorkovich continues to explain. Energy security was not only important for the economy, he said, but particularly for the consumer.

According to Arkadi Dvorkovich, that is why everybody who is currently trying to aggravate the crisis between the EU and Russia needs to realise that it is common practice in the energy market to include this into the price of energy (e.g. Russia has currently raised the gas prices for the Ukraine by 44%). A risk surcharge, he pointed out, was common practice in the economy.

However, this could also be interpreted as Angela Merkel (CDU), the German Chancellor, as well as the German Foreign Minister Frank-Walter Steinmeier (SPD) bearing immediate part of the blame if the energy prices continued to rise for the German consumer. A political scientist explained in the margins of the conference: “Merkel as well as Steinmeier are looking for trouble and a political ice age towards Russia: They want total confrontation and the re-installation of the Iron Curtain – the signals coming from Berlin can hardly be interpreted differently at the moment.”

However, Russia’s Deputy Prime Minister Arkadi Dvokovich continued to explain that Germany could be sure that Russia would also continue to be an absolutely reliable partner in any energy and resource matter for Germany in the future.

Sanctions are a big risk for Russia and Germany

The Deputy Russian Prime Minister warned that losing this relationship would involve a big risk for all parties. He stated that it is fact that Russia as well as Gazprom had always fulfilled their duties and had always abode by the license agreement. Gazprom, for example, has a share of around 10% in East Germany’s biggest employer, the company Verbundgas.

It is additionally important that the investment climate in Russia continued to be designed in a way that companies from Germany and other countries feel comfortable in Russia, the high-ranked Russian politician explained to the attendees of the Raw Materials Conference in Dresden.

Interested audience at the Raw Materials Conference in Dresden: Russian mining students from St. Petersburg.

It is beyond debate, Dvorkovich explained, that foreign investment and know-how needed for further development of resources are also important for Russia. The Russian Deputy Prime Minister declared that international cooperation is required for the long-term benefit of everyone.

He also pointed out that Russia offered a liberalised climate for investments and was particularly attractive in the sector development and application of slate technologies. According to Dvorkovich, it is a fact that Russia had 18% of the world’s resources at its disposal; however, only 2% have so far been developed. As the world’s population was growing, Dvorkovich said, it was now necessary to raise this quota significantly. He made it clear that, despite Russia having high raw material reserves, Russia itself still imported resources; for example, the Russian federation currently obtained roughly 10% of its oil from an oilfield in Iraq jointly operated by LUKOIL (LKOH: НК ЛУКОЙЛ) and the United Arab Emirates.

"Russia is attractive for investors"

In order to make Russia even more attractive for investors in the raw materials sector, the Russian Federation was currently building a new big harbor in Murmansk, Dvorkovich explained in Dresden. Additionally, Russia held numerous licenses for raw material mining in the Arctic, for example, the Deputy Prime Minister said. He continued that Russia was open for cooperation with partners for example from Germany.

Finishing his speech in front of 340 raw materials experts and interested parties from the German economy, the Russian Deputy Prime Minister handed over a cheque for 600,000 Euros to fund raw materials sciences in Germany. He said Russia would like to see the money being used for funding publications and scientific papers – preferably also in Russia. Russia also makes 250,000 Euros available to German scientists who would like to teach about raw materials at universities or academies in Russia.

Prof. Dr. Vladimir Litvinenko (Проф. др. Владимир Литвиненко), rector at the world renowned National Mineral Resources University “Gorny” in St. Petersburg (Национального минерально-сырьевого университета "Горный", website at www.spmi.ru) welcomed this education offensive in the raw materials sector which is not only important in Russia but also in Germany.

The University of Mines in St. Petersburg was founded on 21 October 1773 by the Russian tsarina by Catherina II who is of German descent. Today, the University offers studies in mining, geological prospecting, oil and gas, chemistry and metallurgy, construction, energy, mechanics, economics, fundamentals and humanities. Prof Dr. Vladimir Litvinenko was accompanied by numerous Russian students from the Russian University of Mines, dressed in dark blue, military-looking university uniforms.

In his speech, Litvinenko stressed, that another central scientific field had to be the use of hydrocarbon. In technology research in mining, he said, chemistry is playing a more and more important role – more so than ever before. The mining of many resources, the well-known Russian scientist explained, required a lot of effort and high amounts of chemicals.

Dr. Eckhard Cordes: "Now is the time that managers and companies should keep appointments in Moscow"

Apart from Europe, Litvinenko explained, Russia was in conversation with Japan about the mining and extraction of raw materials. According to him, Japan was currently working on being able to provide gas in the form of liquid gas – which was an interesting technology that is, however, not ready for the market.

One of the most well-known speakers at the German-Russian Raw Materials Conference was Dr. Eckhard Cordes (Др. Экхард Кордес), chairman of the Committee on Eastern European Economic Relations. Up until just over two years ago, Cordes also held the positions of Chairman of the Management Board and CEO of the Metro Group.

Cordes clarified how intensive the German-Russian economic relationship had become using the Metro Group as an example. He said that, in Russia alone, Metro turned over 5 billion Euros. Anyone who thought to do politics using economic sanctions, destroyed something that had been built over many years, he continued. Cordes who used to belong to the illustrious circle of the 30 most powerful German managers (DAX companies) also said he was watching with great sorrow how even the important German-Russian intergovernmental consultations in the Federal Government were being questioned.

He also calls for German companies and managers to keep their appointments in Moscow now more so than ever. Cordes also mentioned that the Committee on Eastern European Economic Relations which is one of the sponsors of the 7th German-Russian Raw Materials Conference was founded 60 years ago. In times like these, the chairman of the Committee said, it was important to stop a potential spiral of sanctions. In Germany, there were 350,000 jobs directly dependent on the economic relationships with Russia according to Cordes.

The future belongs to a comprehensive raw materials spectrum

Prof Valery Yazev (Проф. Валерий Язев), member of the Russian State Duma and president of the non-profit partnership Russian Mining Operators, explained at the 7th German-Russian Raw Materials Conference in Dresden, that the science surrounding raw materials and their extraction was becoming more and more important.

He also underlined that the more efficient extraction and usage of carbon and hydrocarbon should be taken care of. He also showed his support for the idea that the extraction of Helium-3 (He-3) from the moon should be thought about. According to him, Helium-3 is not abundant on the moon; however, it was very efficient.

The 2013 host of the German-Russian Raw Materials Conference, Natalya Vladimirovna Komorova (Наталья Владимировна Комарова), who has been governor of the Khanty-Mansi Autonomous Okrug for four years, additionally explained in Dresden that rigidly holding on to mineral oil is a thing of the past.

The well-versed expert in raw materials is sure that the future belonged to the extraction of a comprehensive spectrum of raw materials. In the 1970s, Komorova studied economics and construction management at the Kommunarsk Mining and Metallurgy Institute and now works as the chairperson of the State Duma Committee on Environmental Resources and Their Management.

Komorova continues that the future in raw materials lied in international cooperation, not only in their extraction but also in their research. Only a connected world was able to master the big challenges in all resource matters, said Komorova.

How important research was, Komorova explained, was shown by the fact that nowadays every 11th ton of mineral oil had to be produced using high-end technology and people had to be prepared that this quota will continue to rise. However, in order to do this, investment is necessary, investment that Russia needs in the raw materials research and extraction sector.

VNG Chairman: Lots of friends in Russia

Dr. Karsten Heuchert, Chairman of the Executive Board of the VNG – Verbundnetz Gas AG (a natural gas company), explained as key speaker that the VNG as the biggest East German company can say that it was not only connected to Russia by a tight multifaceted partnership but that this connection had also led to many friendships. The VNG alone received 250 billion cubic metres of gas every year, according to Heuchert.

Heuchert also pointed out that the close resource partnership had not been shaken by either the Iron Curtain or other crises of the past years and decades. He also said that Russian gas was considerably responsible for the air in East Germany to be clean again and that many technological developments in Germany would remain computer simulations without raw materials from Russia. Additionally, it should not be forgotten that at least 28 million tons of much-needed minerals lied in Russia alone.

Protesting against economic sanctions against Russia: Members of the small German political party “BüSo Bürgerrechtsbewegung Solidarität” (Civil Rights Movement Solidarity party).

Pavel Zavalny (Павел Завальный), member of the Russian State Duma and president of the Russian Gas Society (RGO), said at the 7th German-Russian Raw Materials Conference in Dresden that Russia had become more attractive for investments in recent times.

He pointed at the zero tax option for certain investments in Russia and said that the highest aim for the Russian economy and government had to be to continue developing the big raw material reserves in Russia. He continued that the focus should not only be on the mainland but raw materials should also be developed in the Arctic Sea. According to Zavalny, Russia was prepared to support this effort – even to the point of flagging the ships.

Prof. Dr. Bernd Meyer (Проф. др. Бернд Майер), the rector of the TU Bergakademie Freiberg (Freiberg University of Mining and Technology, Russian: ТУ Фрайбергская горная академия) is proud to see how international the world-renowned mining university founded in 1770 has become. He explained that there are students from 59 countries but the relationship with Russia is closer than with any other country.

Exchange specialists and executive staff between Germany and Russia

Rector Meyer said he was particularly happy to say that the TU Bergakademie Freiberg along with the University of Mines in St. Petersburg can pride themselves on being the oldest montane universities in the world. Exchanging specialists and executive staff between Germany and Russia in the raw materials research and development sector was particularly important, Meyer continued.

The issues for the discussion panel in the afternoon were set primarily as “High-tech raw materials for the energy revolution” and “Opportunities in Russia.” The discussion panel was opened and moderated by Dr. Volker Steinbach (Андрей Гурьев), Head of Department Energy and Mineral Resources at the Federal Institute for Geosciences and Natural Resources.

Speakers at the panel were, amongst others, Boris Levin, the assistant CEO of PhosAgro OAO, as well as Hans-Joachim Welsch, Chairman of the BDI (Federation of German Industries) Committee for Raw Materials Policy. He covered the topic “German-Russian cooperation in the raw materials industry” and its opportunities for the future. He pointed out that he and the BDI deemed the development of rare earths in Russia and elsewhere particularly important.

At the moment, he said, the German economy was highly dependent on the development of rare earths and their purchase from China since China has the biggest deposits. However, for Welsch it was necessary to reduce this dependency. Germany cannot be aware enough of the fact that huge parts of the economic production are based on raw materials, Welsch pointed out.

Another speaker was Dr. Franz-Michael Roth from the Federal Institute of Geosciences and Natural Resources who gave a speech on the development of international mining projects with an eye towards Russia.

"Steinmeier’s embarrassing rants against Russia"

In the meantime, Prof. Armin Reller from the German Phosphorus Platform was holding a speech on “Phosphorus as a high-tech resource.” His PowerPoint presentation showed clearly that phosphorus as a resource is used practically everywhere in the economy.

He asked every attendee who deals with phosphorus to become active in the German Phosphorus Platform. Permanent economic use of the important resource phosphorus could only be ensured through maximum transparency in the circular economy, Prof. Reller explained. He used an image of a drawn pick to illustrate that phosphorus can be found practically everywhere, even in unexpected places, and pointed out that bones also contained phosphorus.

Prof Jens Gutzmer, Director of the Helmholtz Institute Freiberg for Resource Technology, addressed the topic “Rare Earths.” He explained that, in order to build one hybrid car, 20 to 25 different rare earths are needed.

On the evening of April 2, 2014, Alexey Miller (Алексей Миллер), the Deputy Chairman of Gazprom’s Board of Directors (Председатель правления ОАО «Газпром») spoke to the attendees of the conference. He presented a prize to students and pointed out that it would be very important that politics didn’t put the good relationship between Germany and Russia at risk.

The German Foreign Minister Frank-Walter Steinmeier (SPD) had initially agreed to attend the 7th German-Russian Raw Materials Conference; however, he did not show up which was not surprising for many. At the margins of the conference, a representative from the business world said to netz-trends.de that Steinmeier had more than enough to do at the moment to eradicate the last points of sympathy the population had for the SPD with his embarrassing rants against Russia.