German commodity group plans 1 bln euro fund-report

* Aims to invest in commodity projects
* Bank funding often difficult for long-term projects

HAMBURG, April 25 (Reuters) - An alliance of German companies set up to secure raw materials supplies, is planning to launch a fund to attract up to 1 billion euros ($1.3 billion) to invest in commodity projects, its director was quoted as saying in a German newspaper.

The alliance, which aims initially to invest in exploration for rare-earth metals, wants to create the fund because long-term projects such as these are sometimes only able to attract bank finance in later stages, alliance director Dierk Paskert told Wednesday's Financial Times Deutschland.

The German government's commodities strategy aims to help industry secure supplies in the face of intense competition from China and other newly industrialised countries. It includes partnerships with supplier countries and greater cooperation between German commodity consumers.

Twelve major German companies including copper producer Aurubis and chemical groups BASF joined the alliance in January.

The group will seek to take shareholdings in commodity exploration projects, but not in companies already listed on equity markets, Paskert said.

Early projects could be set up in Kazakhstan and Mongolia, two countries with which the German government has agreed raw material cooperation, he said. Other long-term projects were possible in regions such as Canada, Australia and South America.

The alliance is seeking more mid-sized German companies to join and in the long term it is possible membership could be opened to non-German companies, he said. Non-German companies with manufacturing operations in Germany can already join.

The alliance is considering setting up expert groups for specific commodity sectors, but will need clearance from German anti-trust authorities first. ($1 = 0.7574 euros) (Reporting by Michael Hogan; Editing by Erica Billingham)

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