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Lithium producer says West cannot end reliance on China in critical minerals

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Albemarle, the world’s largest lithium producer, argues that building a self-sustaining supply chain for critical minerals in North America and Europe is economically unviable, making it difficult to reduce dependence on China.

Kent Masters, Chief Executive of the U.S.-based company, told the Financial Times (FT) that low lithium prices and high operational costs have made shifting the supply chain westward unprofitable. Lithium is a crucial material for the electric vehicle (EV) industry.

“We’ve been trying to move west, but the prices we’re seeing in the market don’t really allow us to do that,” Masters explained. He added that the United States is “absolutely” at risk of losing its competitive edge against China in the lithium race.

Falling lithium prices and rising challenges

Lithium prices have plunged more than 80% since early last year due to a global slowdown in electric vehicle sales and unfavorable macroeconomic conditions. This decline has reduced demand for lithium while supply continues to grow. “At current price levels, there is no incentive for new entrants,” said Adam Megginson, an analyst at Benchmark Mineral Intelligence.

This market downturn is undermining Western efforts to create a local supply chain for energy-transition metals and reduce reliance on China, which dominates global refining capacity and mining operations.

Earlier this month, Albemarle reported a $1.1 billion quarterly loss due to low lithium prices and announced a 6-7% workforce reduction as part of its cost-cutting measures. Additionally, the company halted plans to build a $1.3 billion refinery in South Carolina and partially scaled back its Kemerton, Australia expansion.

Despite these setbacks, Albemarle remains a key player, operating the only active lithium mine in the U.S. (located in Nevada) and seeking approval for another mine in North Carolina. However, Masters emphasized that the mine’s development hinges on future economic conditions: “Once we get the permits, we will have to decide whether to do it or not.”

In 2024, Albemarle plans to allocate $800-$900 million for capital expenditures, half of this year’s spending.

The broader industry is also scaling back. Piedmont Lithium shelved plans for an $800 million refinery in Tennessee, and International Battery Metals suspended operations at its Utah plant just two months after commencing production.

China’s growing dominance

Industry experts warn that the gap between China and the West is widening. “China accounted for 65% of the world’s lithium refining capacity last year and is expected to produce more than half of the global supply by 2040,” said Oliver Montique, a trade and supply chain analyst at Eurasia Group.

Some progress is being made. Last month, Rio Tinto acquired Arcadium Lithium for a record $6.7 billion, marking a significant step for Western producers.

However, according to Macquarie, global mine supply is expected to grow by 24% in 2023 and 21% in 2024, with lithium prices unlikely to recover before 2027.

Although the U.S. Inflation Reduction Act (IRA) offers tax incentives to promote non-Chinese sourcing and boost domestic production, Albemarle claims the legislation has not accelerated the development of a comprehensive minerals supply chain.

Rich Nolan, President of the National Mining Association, has called for a “more aggressive and holistic approach” to strengthening domestic production. This includes measures such as stockpiling, buyback barriers, and upfront market commitments.

In addition to low prices, lithium producers face significant challenges, including lengthy permitting processes, labor shortages, and political instability. Analysts warn that potential policy changes, such as efforts by former President Donald Trump to roll back the IRA and eliminate the “electric vehicle mandate”, could further suppress EV adoption and reduce demand for lithium.

ASIA

Syria will not follow Afghanistan’s Taliban model of governance

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In an astonishing statement, Ahmed Shará, also known as Abu Mohamad Jolani, the leader of the Hayat Tahrir al-Sham (HTS) said that he will allow the girls to go to schools and will not turn Syria like Afghanistan under the rule of the Taliban.

Jolani, the de facto ruler of Syria, said that he will distance himself from the Taliban’s strict policies on women’s rights, and said that Syria will not follow the Taliban’s mode of governance.  

Jolani, who brought down the government of Bashar al-Assad and also widely welcomed by the Taliban, said that he believes in the education of women and girls and will not make Syria like Afghanistan.

“Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal. The Afghan model cannot be applied here,” Jolani told a BBC reporter.

Jolani says that Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal.

Jolani’s comment came when the Taliban congratulated the HTS-led victory by Jolani over Assad’s regime after years of fighting. The Afghan Foreign Ministry celebrated Jolani’s victory through a statement and hoped Jolani can bring peace and stability in the country.

“It is hoped that the power transition process is advanced in a manner that lays the foundation of a sovereign and serve-oriented Islamic government in the line with the aspiration of the Syrian people; that unifies the entire population without discrimination and retribution through adoption of a general assembly; and a positive foreign policy with world countries the safeguard Syria from a threat of negative rivalries of foreign actors and creates conditions for the return of millions of refugees,” the statement by Taliban Foreign Ministry.

However, Jolan’s position on the rights of women and girls is in great contrast with the current view of the Taliban leadership. Women and girls have been banned from education and work since the return of the Taliban in August 2021, following the collapse of the Republic System and withdrawal of the US troops from Afghanistan. Girls and women are even banned from medical institutions and visiting public spaces.

Jolani says he has a plan to create a government based institution and a council chosen by the people. 

The situation got worse when the Taliban’s Ministry for the Promotion of Virtue and Prevention of Vice called women’s voices “immodest” compounding their exclusion from public life. This year, it has been marked as three years since girls were banned from pursuing education over sixth grade. Besides that, on December 20, 2022, the Taliban’s Ministry of Higher Education announced that women would be barred from attending public and private universities.    

In an interview with CNN, Jolani said that he has a plan to create a government based on institutions and a “council chosen by the people.”

“When we talk about objectives, the goal of the revolution remains the overthrow of this regime. It is our right to use all available means to achieve that goal,” said Jolani.

“The seeds of the regime’s defeat have always been within it… the Iranians attempted to revive the regime, buying it time, and later the Russians also tried to prop it up. But the truth remains: this regime is dead.”

Moreover, he also said the Syrian people are the “rightful owners” of the country after the ouster of Assad, and declared a “new history” has been written for the entire Middle East.

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Yoon summoned again for questioning on treason charges

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A joint law enforcement team investigating South Korea’s martial law case announced on Friday that it has issued a second summons to ousted President Yoon Suk Yeol, requesting his presence for questioning next week. The inquiry concerns his alleged involvement in the failed implementation of martial law.

The team has scheduled the questioning for 10:00 a.m. next Wednesday at the Corruption Investigation Office for Senior Officials (CIO) headquarters in Gwacheon, located just south of Seoul. This marks the second summons after Yoon refused to cooperate with the initial notice earlier this week.

The decision to hold the questioning on a public holiday appears to be a strategic move by the CIO, likely aimed at addressing security concerns. The office confirmed that the summonses were delivered via express mail and electronically to both Yoon’s residence and the presidential office in Yongsan. Notably, after Yoon’s team refused to accept the first subpoena, the CIO opted against delivering the documents in person for this round.

The investigation focuses on Yoon’s role in the December 3 martial law declaration, which he revoked following a vote in the National Assembly. If Yoon continues to disregard the summons without valid justification, the CIO may seek a court order to detain him for up to 48 hours.

Yoon faces allegations of sedition and abuse of office, charges that have gained traction since his dismissal by parliament last Saturday. His suspension from office remains in effect pending a decision by the Constitutional Court, which will determine whether he is permanently removed or reinstated.

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Xi Jinping champions economic diversification during Macau visit

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During a three-day visit to Macau commemorating the 25th anniversary of its return to Chinese sovereignty from Portugal, President Xi Jinping emphasized the importance of economic diversification and maintaining the “one country, two systems” framework.

Speaking at the swearing-in ceremony for Macau’s new Chief Executive Officer, Sam Hou-fai, Xi urged the administration to make economic diversification the city’s primary focus. Sam, the fourth leader since the 1999 handover and the first mainland-born Chinese official to hold the position, is expected to align closely with Beijing’s objectives to reduce Macau’s reliance on gambling. The gambling industry, which accounts for approximately 80% of Macau’s tax revenue, has been the cornerstone of its rapid economic growth in recent years.

“Macau should prioritize proper economic diversification,” Xi stated, calling for enhanced policy support and investment in emerging sectors. He also reiterated the significance of the “one country, two systems” principle, stressing its role in ensuring the city’s “prosperity and stability” for the long term.

Xi’s visit included stops at the Macau University of Science and Technology, where he explored laboratories focusing on traditional Chinese medicine and planetary science. He also attended a cultural performance at the Macau Dome and met with local stakeholders, according to Chinese state media. His trip marked a shift in tone, with Anthony Lawrence, founder of Intelligence Macau, noting that it was the first time Xi publicly praised Macau for its progress rather than delivering critiques or instructions.

Since the liberalization of Macau’s gaming monopoly in 2002, the city has attracted significant foreign investment, including from prominent US casino operators such as Las Vegas Sands, MGM, and Wynn Resorts. However, the economy struggled during the COVID-19 pandemic due to travel restrictions, and recovery has only recently begun.

On Friday, Macau’s casinos were bustling with visitors, while non-gaming initiatives like a stamp exhibition co-organized by MGM China and Beijing’s Palace Museum showcased the city’s efforts to diversify its offerings.

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