Germany Turns to Madagascar for Critical Minerals for its Auto Industry
In the second week of May 2026, German geoscientists visited Madagascar to evaluate the potential of Madagascar as a secure source of #CriticalMinerals. Germany‘s auto industry and electric vehicles of the future cannot do without certain Critical Minerals that go into the energy storage system (#ESS) and electrical system. The delegation was led by Germany’s Federal Institute for Geosciences and Natural Resources.
Madagascar has emerged as Africa’s top graphite producer as demand booms due to the acceleration of the #EnergyTransition. According to data released by the United States Geological Survey (USGS), Madagascar overtook Mozambique to become Africa’s number one #graphite producer with 85,000 tonnes in 2024. Due to political unrest in 2025, output dropped to about 80,000 tonnes in 2025.
Thus, the German delegation paid a visit to NextSource Materials’ Molo graphite mine to assess it as a long-term supplier for Germany and the European Union (EU). The end-user customers are household auto brands, including Volkswagen, BMW, and Mercedes-Benz. ThyssenKrupp already has an offtake agreement with NextSource Materials (TSX: NEXT; OTCQB: NSRCF) for a period of ten years signed in 2021.
As part of the larger EU drive to diversify sourcing of Critical Minerals, Germany has set up a EUR one billion fund managed by KfW and partnered with France and Italy to come up with a joint EUR 2.5 billion investment fund.
Given its rich mineral resources, Madagascar has attracted quite a bit of Foreign Direct Investment (#FDI) over the past few years. Other than NextSource Materials, Tirupati Graphite and Etablissements Gallois also operate in the graphite mining sector in Madagascar.
NextSource’s Molo mine produced about 11,000 tonnes of graphite in 2025, but that figure is below its potential, which can go as high as 17,000 tonnes per annum.
Globally, graphite production increased by nearly 10% year-on-year to 1.7 million tonnes in 2025. One interesting point to note is that the growth came most from mines in Africa, notably in Madagascar, Mozambique and Tanzania.
Madagascar is known for its large and varied reserves of mineral resources, but seems tied down by the so-called ‘Resources Curse!’ So far, Madagascar has been struggling to transform the riches in its soil into improved well-being for its citizens. Actually, NextSource picked the United Arab Emirates to site its state-of-the-art battery anode production facility.