Lithium price rises to record high level

According to a report by South China Morning Post, lithium metal price in the Chinese market reached US$315,000/ton; just days after Argentinean President Alberto Fernandez signed his country up for China’s Belt and Road Initiative during a high-profile trip to Beijing this month.

The spot price has risen to this level for the first time – more than four times what it cost a year ago.

The two countries happen to be the world’s major players in the supply chain of the metal – an essential material used in electric vehicle (EV) batteries.

Argentina is located in a region with the highest concentrations of the mineral – South America’s so-called Lithium Triangle, which contains more than half of the world’s reserves.

Chinese companies are the biggest buyers and investors of lithium mines around the globe and refine two-thirds of the world’s lithium.

A vast deposit of one of the most highly coveted metals on Earth could potentially be located in the region around Mount Everest, according to Chinese scientists.

The researchers’ discovery of lithium near the world’s tallest mountain comes as global demand for the metal has been skyrocketing, sending prices to record levels and further fuelling geopolitical competition for strategic resources.

The ore deposit may contain as much as 1.0125 million tons of lithium oxide, according to the group of scientists from the Institute of Geology and Geophysics at the Chinese Academy of Sciences (CAS).

But it is not yet known how much the new Himalayan deposit – dubbed Qiongjiagang, after the nearest peak – could be worth.

It may also be the country’s third-largest lithium deposit after one at the Bailong Mountain site in the Xinjiang Uygur autonomous region, and the Jiajika deposit in Sichuan province, according to a report by China Science Daily.

The content rate of lithium oxide in the newly discovered deposit is also high enough to be of “industrial value”, according to the report.

“The Qiongjiagang lithium pegmatite deposit has good conditions for mining,” Qin Kezhang, Head of Research Team, was quoted as saying.

He pointed to the shallowness of the deposit and the quality of the ore, in noting that it would be relatively easy to mine and extract. He also said it is also in a favorable location, geographically – far from the heart of the Qomolangma nature preserve and still accessible. Qomolangma is the Tibetan name for Everest.

However, Qin said, exploitation of the lithium deposit is a long way off, as it is still in the initial “pre-study” phase.

As major economies are all aiming to shift to electric cars in the global fight against climate change, the silvery-white metal has been increasingly considered “new oil” or “white gold”, as it is an essential component in electric vehicle (EV) batteries.

According to an estimate from the International Energy Agency, global demand for lithium would grow by more than 4,000% by 2040 if the world achieves its climate goals.

Currently, 85% of lithium comes from Latin America and Australia, according to market intelligence provider IHS Markit. The two regions are home to 64% of the world’s known lithium, according to the 2022 Mineral Commodity Summary from the United States Geological Survey.

The newly discovered deposit is said to be a type of lithium-bearing rock called spodumene – the same as that from Australia – while deposits in Latin America are found in brine lakes spanning the borders of Bolivia, Argentina and Chile – known as the Lithium Triangle.

As the world’s biggest EV market, Chinese companies refine two-thirds of the world’s lithium and dominate the global battery production.

That dominance has triggered concerns among the United States and its allies, which have vowed to reduce their supply-chain dependence on China.

Meanwhile, three quarters of the mineral supply in China relies on imports. More than 96 per cent of spodumene exports from Australia go to China, IHS Markit’s data showed, while more and more Chinese companies are venturing into Latin America for mining projects.

United States-China ties as fraught as ever

At the height of the Cold War, US President Richard Nixon flew into communist China’s center of power for a visit that transformed US-China relations and China’s position in the world in ways that was unimaginable at the time.

The relationship between China and the United States was always a challenge, and after half a century of ups and downs, is more fraught than ever. The Cold War is long over, but on both sides there are fears a new one could be beginning. Despite repeated Chinese disavowals, the US worries that the democratic-led world that triumphed over the Soviet Union could be challenged by the authoritarian model of a powerful and still-rising China.

 “The U.-China relationship has always been contentious but one of necessity,” said Oriana Skylar Mastro, a China expert at Stanford University. “Perhaps 50 years ago the reasons were mainly economic. Now they are mainly in the security realm. But the relationship has never — and will never — be easy.”

Nixon landed in Beijing on a gray winter morning 50 years ago. Billboards carried slogans such as “Down with American Imperialism,” part of the upheaval under the Cultural Revolution that banished intellectuals and others to the countryside and subjected many to public humiliation and brutal and even deadly attacks in the name of class struggle.

Nixon’s 1972 trip, which included meetings with Chairman Mao Zedong and a visit to the Great Wall, led to the establishment of diplomatic relations in 1979 and the parallel severing of formal ties with Taiwan, which the US had recognized as the government of China after the communists took power in Beijing in 1949.

Premier Zhou Enlai’s translator wrote in a memoir that, to the best of his recollection, Nixon said, “This hand stretches out across the Pacific Ocean in friendship” as he shook hands with Zhou at the airport.

For both sides, it was a friendship born of circumstances, rather than natural allegiances.

China and the Soviet Union, formerly communist allies, had split and even clashed along their border in 1969, and Mao saw the United States as a potential counterbalance to any threat of a Soviet invasion.

Nixon, embroiled in the Watergate scandal at home, was seeking to isolate the Soviet Union and exit a prolonged and bloody Vietnam War that had divided the US society. He hoped that China, an ally of communist North Vietnam in its battle with the US-backed South, could play a role in resolving the conflict.

The US president put himself in the position of supplicant to Beijing, said June Teufel Dreyer, a Chinese politics specialist at the University of Miami. Chinese state media promoted the idea that a prosperous China would be a peaceful China and that the country was a huge market for the US exports, she said.

It would be decades before that happened. First, the US became a huge market for China, propelling the latter’s meteoric rise from an impoverished nation to the world’s second largest economy.

Nixon’s visit was a pivotal event that ushered in China’s turn outward and subsequent rise globally, said the University of Chicago’s Dali Yang, the author of numerous books on Chinese politics and economics.

 

Pakistan should get ready to trade with Iran

According to a Dawn report the revival of the Joint Comprehensive Plan of Action (JCPOA) signed between Iran and leading super powers in 2015 is likely to present Pakistan some of the rarest opportunities. It will not only open up new avenues for closer economic engagement between the two neighbors, but access to oil, gas oil and minerals.

According to credible media reports, JCPOA is expected early next month. To earn Iran’s trust and to convince the world of the US intent, President Joe Biden has restored some sanction waivers early this month. These breaks would allow firms around the world to trade with Iran.

The private sector, aware of the US hostility towards Iran and its dominant position in the global market, particularly over capital flows through the banking system.

Razzak Dawood, advisor to Prime Minister on commerce, did not divulge much on the possibility of visiting Tehran to explore possibilities. Responding to Dawn, he did not hide his lack of interest. “I am looking into it.”

The reports from Vienna are calming in a global environment of growing geopolitical rivalries threatening whatever is left of Covid-battered economies. If the growing energy insecurity amidst rising oil prices and vanishing fears of Western backlash kick-start the Pakistan-Iran oil pipeline project, it will be a real boon for the people and the private sector groaning under the burden of rising fuel prices, hoped an incorrigible optimist.

Journalist-turned-politician Senator Mushahid Hussain Syed was hopeful of a positive outcome if the sanctions are lifted on Iran and the financial flows are eased. The partial sanction waiver by the United States is good news for Pakistan. as it will open up opportunities for boosting commercial cooperation between the two neighbours. Coupled with US humanitarian sanctions waiver for Afghanistan after January 23-25 Oslo meeting, this augurs well for lowering tensions in the region.

“While Iranian minister’s visit was linked more with cross-border security issues, especially terrorism in Balochistan, last year’s opening of a third border crossing point between Pakistan and Iran can provide an impetus for bilateral trade and travel.

“The biggest issue was that, fearing Western retaliation; Pakistani banks were not willing to open a letter of credit (LC) for legitimate overland trade. Perhaps, eventually, the Pakistan-Iran pipeline deal can also be revived. Iran can provide energy security to Pakistan which would strengthen the economy.

“An additional force multiplier for Pakistan-Iran economic ties is the China-Iran strategic economic agreement,” he responded in writing when reached for his input.

Dr. Manzoor Ahmed, former Ambassador of Pakistan to the World Trade Organization (WTO), lament limited trade and implicitly blamed a weak foreign policy.

“Pakistan has a very low trade volume; its exports to Iran can be multiplied manifold. Despite sanctions, India’s exports crossed US$3 billion as it allowed Iran to buy in Indian currency,” he said.

In the past, it was not US sanctions alone, but also the Saudi pressure that prevented Pakistan from deepening trade ties.

Pakistan should start preparing for the post-sanction period. It enjoys potential to diversify its energy import sources. Both the countries enjoy a long common border. There is also a probability of opening more border posts.

Pakistan has already signed a preferential trade agreement with Iran. The time has come to reciprocate the good will gesture of Iran.

Razak and hawks poles apart on trade with India

According to a Dawn newspaper report, Abdul Razak Dawood, Adviser to the Prime Minister on Commerce, Textile, Industry and Production, and Investment has said that trade with India is the need of the hour and beneficial to both countries. 

“The trade with India is very beneficial to all, especially Pakistan. And I support it,” he added.

“As far as the Ministry of Commerce is concerned, its position is to do trade with India and my stance is that we should do trade with India and it should be opened now,” Dawood said.

Dawood said something which is logical and need of the hour. Many others believe once Pakistan and India start with Trade it would be only a matter of time to open other doors.

Many analysts believe that if Pakistan continue to beat the drum that there will be no trade with India unless article 370 is re-instated, then in the next 100 years Pakistan will not be able to do trade with India.

They also say that many hawks, who play a key role in Pakistan’s policy insist on banning trade, travel, sports and people to people contact with India. Therefore, whatever Razzak and likeminded people are saying does not matter.

It may be recalled that in the recent past EEC made a decision to allow import of cotton from India, but the decision was taken back on the insistence of Prime Minister Khan. It may be said the Khan is also under the pressure of hawks.

The people privy to the decision making process say that at times open and backdoor diplomacy sound hoax call, because hawks know exactly how to discourage trade with India.    

South Korea and Iran to resume oil trade

South Korea and Iran are working closely on resuming oil trade and unfreezing Iranian funds, said South Korean Foreign Ministry. The country was previously one of Iran's leading Asian oil customers. The move coincides with negotiations resuming in Vienna to revive Tehran's 2015 nuclear agreement with world powers.

Tehran has repeatedly demanded the release of about US$7 billion of its funds frozen in South Korean banks under US sanctions, saying Seoul was holding the money hostage.

"Our side expressed hope for the resolution of issues related to sanctions such as the transfer of frozen funds upon the agreement on the restoration of the Joint Comprehensive Plan of Action (JCPOA) now underway in Vienna," a South Korean statement said, using the full name of the nuclear accord.

The Iranian side stressed the importance of an early resolution of the matter of the frozen funds, it added.

Iran and South Korea are also discussing the trading of crude oil and oil products, on the condition sanctions are lifted as progress is made in nuclear negotiations, the statement said.

Previously South Korean oil buyers chiefly imported condensate, or an ultra-light form of crude oil, from Iran.

In Tehran, the Iranian Foreign Ministry spokesman Saeed Khatibzadeh said Iran saw the talks as a possible indicator of attempts to re-establish trade ties with South Korea.

"This expert meeting's results can be seen as a test of South Korea's seriousness to solve existing problems between the two countries and normalizing ties, including through oil and condensate sales to Korea and Korean firms' investments in Iranian projects," Khatibzadeh told state media.

"Therefore, Iran will carefully follow up on the results of these negotiations in considering how to regulate relations between the two countries," Khatibzadeh added.

The United States reimposed sanctions on Iran in 2018 after then President Donald Trump withdrew from the nuclear deal under which Tehran agreed to curb its nuclear program in exchange for US sanctions relief.

South Korea, the world's fifth-largest crude buyer, imported a total of 12.6 million tons of crude in January against 10.3 million tons a year ago, preliminary data from the Korea Customs Service showed. 

The biggest challenge for Biden

The biggest challenge for US President Biden leadership is brewing crisis caused by Russian aggression against Ukraine. The stakes are high for Biden, after the chaotic withdrawal from Afghanistan that prompted widespread criticism and left allies questioning US leadership. 

Political observers say that the unfolding situation represents an opportunity for Biden to demonstrate American leadership and draw a contrast with former President Trump’s handling of Russian President Vladimir Putin.  

“More than anything, he has to show all these people that he is not the weak and frail leader Republicans say he is,” said one Democratic strategist. “In this case, it’s about perception more than anything else.”

There are also some political risks, especially if the crisis spirals into war and impacts the domestic economy. 

With an eye toward the upcoming midterm elections, Republicans have tried to paint Biden as weak on issues of domestic and foreign policy.

But Democrats like the contrast between Biden’s approach to Russia and how Trump, who spoke warmly of Putin and exhibited deference to the Russian leader, dealt with the Kremlin. They think this will be an effective response to any GOP attacks on Biden’s approach to the crisis. 

“Foreign policy is one of those areas where presidents can look or seem presidential,” said Basil Smikle, a Democratic strategist and director of Hunter College’s public policy program. 

“Particularly in the post-Trump environment where we all have been witness to the Trump-Putin bromance, if you will, I think voters will be able to see, number one, Biden on the world stage looking presidential, and two, can he look presidential against Putin where Donald Trump did not,” Smikle said.  

In a recent speech from the White House, Biden pledged to give diplomacy “every chance” to resolve the crisis while issuing a stern warning to Russia against invading Ukraine.   

“The world will not forget that Russia chose needless death and destruction,” Biden said.

“Invading Ukraine will prove to be a self-inflicted wound.”  

Biden administration officials have warned a Russian invasion of Ukraine could happen at any time, but Russia sent some signals that it may be willing to de-escalate. Biden is likely to receive credit if conflict is avoided, while he may incur some blame if the situation spirals out of control.  

Biden’s approach to the crisis has been focused on uniting allies behind a common approach to pushing back against Putin’s provocations and preparing a sanctions package that would cause pain to the Russian economy if it were to launch a renewed military invasion of Ukraine.   

Biden has been firm in his engagements with Putin, proposing “swift and severe costs” in the event of an invasion in a phone call over the weekend. He has sent thousands of troops to defend NATO allies in Eastern Europe while being clear that US troops will not be sent into Ukraine to fight Russia. The troop movements have even won some praise from Republican lawmakers.  

Much of the economic impact of a full-scale Russian invasion of Ukraine is expected to be centered in Europe, but it could drive up energy costs in the US, compounding the price pressures Americans are already facing.  

Biden acknowledged this possibility during his address on Tuesday and said his administration is “taking active steps to alleviate the pressure on our own energy markets.” 

“I will not pretend this will be painless,” he said. 

The Biden administration has been trying to fend off a potential energy crisis by engaging with countries and major energy companies to find a way to offset any energy shortage, given Europe’s reliance on Russian gas. 

Republicans have hammered Biden over inflation for months, seeking to convince voters that his policies are to blame and that he’s doing little to address high prices.  

“International crises could change the maps at home,” said Alex Conant, a GOP strategist.  

The economy and the pandemic will always matter a lot to people, Conant said, but if an international conflict escalates to the point that it affects the domestic economy or troops have to be deployed, it could definitely influence people’s views when voting.

Observers say this particular foreign policy scenario is different from the Afghanistan withdrawal that many see as a pivotal, negative point in Biden’s approval ratings as president. 

“I think the situation in Russia/Ukraine is quite different politically than Afghanistan,” said Richard Fontaine, the CEO of the Center for a New American Security who served as a foreign policy adviser to the late Sen. John McCain.  “The worst-case scenario is a full-scale invasion of Ukraine and if it happens, it will be despite the administration's efforts to avert it. If Putin is determined to go forward, no one is going to stop him.   

“That, I think, is different than Afghanistan, where at issue was a US policy of withdrawal implemented by the United States — and over objections from some of our allies.”  

The Afghanistan withdrawal struck at the heart of the competency message that Biden relied on during his successful presidential campaign. It was followed by a drop in the president’s domestic poll numbers that have not recovered as the nation grapples with the enduring coronavirus pandemic and inflation.  

There is limited data thus far on views of the Russia-Ukraine crisis and Biden’s handling of it. 

A CBS News poll released last week found that 70% of Democrats believe Biden’s approach to Russia is “about right,” while 44% of independents said the same. Only 16% of Republicans said his approach is “about right,” while 59% said it is too friendly and 25% said it is “too hostile.” 

Democratic strategist Rodell Mollineau said the White House has handled the crisis well to date.  

“This administration, the amount of communicating they’re doing on this is important. It shows Russia and the Ukraine that the US is invested, and it shows the American people this is something the US takes seriously,” Mollineau said.  

At the same time, Fontaine observed that the current crisis could have adverse political ramifications for Biden if it consumes his time and takes his attention away from other priorities of the Biden administration. 

“If that goes on indefinitely, it could produce opportunity costs for other administration priorities, in both foreign and domestic policy,” he said.  

Democrats say whatever happens, it’s unlikely to be a defining issue in this year’s midterms or the presidential race in 2024. 

As Democratic strategist Eddie Vale put it, “The 2022 and 2024 elections are going to hinge on what happens in Kenosha, not Kyiv.” 

 

Iran-Uzbekistan Joint Economic Committee Meeting Scheduled

Iranian Industry, Mining and Trade Ministry will hold 14th Iran-Uzbekistan Joint Economic Committee meeting on February 20-21, said an official of Trade Promotion Organization (TPO).

Director General of TPO’s United States and Europe Office, Mohammad-Reza Karimzadeh said on Friday that the 14th Iran-Uzbekistan Joint Committee meeting has been convened in Tehran for the promotion of trade among the two countries.

Expert committees have held talks in recent days to coordinate the preparation of the draft for a memorandum of understanding (MOU) between the two countries on economic, investment, customs, transportation, energy, health, scientific, technological, tourism, cultural and agricultural arenas, Karimzadeh said.

The official further noted that given the importance of enhancing relations between the private sectors of the two countries, the organizers also plan to hold a seminar on trade opportunities of the two nations on the sidelines of the mentioned meeting at the venue of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) on February 21, 2022.

Talking about the significance of the Joint Economic Committee meeting in developing the trade and economic relations between Iran and Uzbekistan, the Iranian official said, Uzbekistan is one of the important markets for Iranian commodities. Iran’s exports to Uzbekistan have witnessed significant growth in recent months, Karimzadeh said.

Iranian Deputy Foreign Minister for Economic Diplomacy Mehdi Safari said on February 17, 2022 that the Islamic Republic is going to hold two joint economic committee meetings with Uzbekistan and Kazakhstan in Tehran in the coming days separately.

It is expected that holding such meetings will help sign promising agreements for future cooperation in different fields, Safari noted.

According to the Deputy Foreign Minister, a delegation comprising of experts from Pakistan will also visit Tehran in the near future to discuss collaborations with officials in Iran’s agriculture sector.

Pakistan and Iran have so far shown determination to enhance economic and trade ties between private and administrative sectors of both countries, Safari added.