Big Auto does business with Big Shovel
Then there’s Big Auto, which is desperate to secure battery mineral supplies from Big Shovel. At its latest investor day, Ford announced a string of lithium deals with miners, including the US-based Albemarle and Chile’s minority-Chinese-owned SQM. The automaker’s other supply agreements are with Utah-based Compass Minerals, California-based EnergySource Minerals, and Canada’s Nemaska Lithium.
Another development that will help Big Auto: a US-Australia pact to coordinate policies and investment in critical minerals, with president Joe Biden pledging to push for Australian minerals to be treated as a “domestic source” under the US Defense Production Act, and to allow Australian miners to tap Inflation Reduction Act tax incentives.
Canberra is thrilled: Its resources minister called the deal “historic,” adding that Australia’s potential to “become a critical minerals and renewable energy superpower cannot be underestimated.”
Congo wants a bigger slice of the minerals resource pie
Over in the Democratic Republic of Congo, the government is looking to increase its stake in its copper and cobalt joint venture with Chinese firms to 70% from 32%. According to Reuters, the DRC sees the current JV structure as “lopsided,” leaving the country shortchanged in the true value of the resources that are being mined and exported. The JV, called Sicomines, is currently minority owned by Congolese state mining company Gecamines and dominated by Chinese companies Sinohydro and China Railway.
Of course, even if Congo manages to negotiate a large stake, the reality is that China still dominates processing: The country commands 65% of global cobalt processing capacity, and 40% for copper. China’s share of battery manufacturing is even larger.
Still: Could this China-Congo friction be a chance for the US to swoop in?
Processing capacities for copper (L) and cobalt (R)
Source: International Energy Agency
Asia is gobbling up Russian oil
Global oil flows are getting majorly rejigged as India and China snap up cheap and sanctioned Russian oil spurned by western nations.
Data from Kpler show that China and India sourced over 30% of their combined oil imports from Russia, Iran, and Venezuela in April, up from 12% last February. Concurrently, their oil purchases from West Africa and the US have fallen significantly. Meanwhile, record high temperatures in Asia mean that countries there are increasingly turning to Russian oil, gas, and coal, to meet energy demand.
Russia is all too happy to sell. It needs the revenue. And deepening reliance from its customers means it can use energy as leverage to pressure countries, including India, to undermine financial sanctions against Moscow.