Chile multitasks on critical minerals
The world’s No. 2 lithium producer, Chile, announced in April that it would nationalize the white metal industry. We now have a a clearer idea of what that will look like.
Beginning in the first half of next year, the government will tender permits for lithium exploration and exploitation permits, with state-owned Codelco tasked with negotiating deals with new companies as well as current miners US-listed Albemarle and Chinese minority owned SQM. At the same time, the Chilean government wants Codelco to boost its copper output. One immediate question: can Chile manage to tackle both metals at once?
Meanwhile, US companies stand a better chance of accessing Chilean lithium thanks to the Senate’s ratification this week of a tax treaty with the South American nation.
CATL heads upstream
CATL just sealed a 1.4 billion USD deal with Bolivia to build two lithium extraction plants, helping the country develop its largely untapped reserves in the Uyuni and Oruro salt flats. The deal comes after Bolivia tapped a CATL-led Chinse consortium in January to develop lithium deposits in a partnership deal.
While CATL has invested in numerous upstream mineral projects, it doesn’t currently produce lithium. With the latest Bolivian projects, the Chinese battery giant will officially produce battery raw materials and directly enter the EV supply chain’s upstream-most node. That means more vertical integration—and more leverage over other industry players.
In other upstream news: California-based KoBold Metals, which uses artificial intelligence to explore for critical minerals, has just raised a 200 million USD round valuing the company at 1 billion USD. Apparently there are unicorns underground, too. Now for the next step: processing.
The Middle East eyes metals, plastics, and EVs
Flush with cash from the high oil prices of recent months, the Middle Eastern state firms are casting about for attractive deals in plastics and metals.
This week, Abu Dhabi energy giant Adnoc made an initial 11 billion-plus USD takeover approach for Covestro; the German chemicals maker reportedly spurned the offer within days. Meanwhile, Saudi Arabia’s sovereign wealth fund wants to buy a stake in Brazilian mining giant Vale’s metal unit for 2.5 billion USD.
And the Mideast state investors are looking further downstream, too. The Abu Dhabi government has just taken a 7% stake in Chinese EV maker NIO. That follows Saudi Arabia’s 5.6 billion USD investment last week with another Chinese EV firm, Human Horizons. Meanwhile, China’s Qiantu Motors just signed an agreement with Jordan’s Manaseer Group to establish a joint venture in the country, from which it plans to expand into the Middle East and North Africa markets.
Covestro stock price
Successful and failed LNG shopping trips
This week brings a tale of two very different LNG deals.
On the successful front: China National Petroleum Corporation and QatarEnergy sealed a 27-year contract, with CNPC committing to buying four million tons of LNG from Qatar, in addition to taking an equity stake in the Gulf nation’s North Field LNG project.
On the foiled front: no companies responded to Pakistan’s tender to buy six shipments of the chilled fuel for October-to-December delivery. Producers were reluctant to sell reportedly because foreign banks refused to repay funds in case the buyer—the foreign-exchange-starved Pakistan—cannot. Nor has Pakistan managed to secure long-term deals. That’s all bad news, and leaves the country vulnerable to years of energy shortages.