Chancellor Olaf Scholz hopes his visit to Latin America this weekend will help Germany secure additional lithium supplies needed by auto giants Mercedes-Benz Group AG and Volkswagen AG for electric car batteries.

Chile is the world’s second largest supplier of lithium after Australia, and most of its production is now ordered from China. Scholz, who will meet with Chilean President Gabriel Boryk in Santiago on Sunday, wants a larger share of the supplied lithium at the expense of China, writes Bloomberg.

The German government has prepared an unbeatable offer against China, sources familiar with the negotiations say.

Large developed countries such as Germany are competing with each other for increasingly scarce resources, and access to metals and rare earth elements is critical to the transition to a greener and more technologically advanced economy.

In the global race for many goods, China has become the dominant supplier or processor, drawing attention to the enormous influence of the Beijing government.

Germany, which in recent decades has been heavily dependent on fossil fuel imports from Russia, is trying to diversify its suppliers of materials needed by the economy after Putin’s invasion.

Germany and Argentina signed a memorandum of understanding in Buenos Aires on Saturday aimed at securing Berlin’s access to the country’s rich lithium resources.

Only two companies produce lithium in Chile – Albemarle Corp. US-based and local firm SQM, in which Tianqi Lithium Corp. from China has a share of more than 20%. They mainly produce lithium carbonate, over 90% of which goes to Asia.

While Chile and Australia provide most of the world’s lithium supply, China has more than half of the world’s capacity to refine and process it into specialized battery chemicals.