It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Thursday, May 18, 2023
EU nears critical materials agreements with Argentina and Chile
The European Union is working on deals with Argentina and Chile that will widen its access to critical minerals and metals such as lithium needed for electric-vehicle batteries as part of its goal of creating a less carbon-intensive economy.
Preliminary memorandums of understanding could be signed during the next four months, according to the European Commission, the EU’s executive arm, which added that further partnerships are possible in South America and beyond.
This is the latest effort by the EU to secure access to resources that are crucial for its clean-energy and digital transition, and to reduce its dependence on a handful of suppliers that include China. It follows agreements with Canada, Ukraine, Namibia and Kazakhstan. Brussels is also in talks with Norway and Greenland.
“The strategic partnerships will allow both sides to jointly develop investment projects on sustainable and resilient raw materials value chains, while specifically enhancing collaboration on research and innovation,” a commission spokeswoman said on Wednesday.
A spokesman for Argentina’s Energy Secretariat said the government is working on a memorandum with the EU to help the country sustainably develop its metals exploration and processing industries. According to a draft seen by Bloomberg, it covers 42 raw materials.
Demand for lithium, of which Argentina is a key provider, is expected to be 12 times greater by 2030 and 20 times higher by 2050. The EU has agreed to ban the sale of new cars emitting C02 by 2035 as it bets on electric vehicles.
The preliminary agreement will likely come ahead of Argentina’s presidential election in October, where the ruling Peronist coalition faces long odds and it isn’t clear what lithium policy a new government will implement.
South America’s second-largest economy is also seeking special status to qualify for benefits under the US Inflation Reduction Act, allowing its lithium to be used by US carmakers.
Chile is the world’s second-largest supplier of lithium after Australia and much of its output is currently processed by China, where costs are low. German Chancellor Olaf Scholz met with Chilean President Gabriel Boric in Santiago earlier this year in an effort to secure additional supplies.
(By Jorge Valero and Alberto Nardelli, with assistance from Jonathan Gilbert)
Conflict brings Sudan’s lucrative official gold trade to a halt Bloomberg News | May 17, 2023 Sudan. (Reference image by UNAMID, Flickr).
Sudan’s official gold industry, the country’s largest revenue earner, has totally collapsed due to a spiraling month-old conflict in the North African nation, the head of the state-run mining company said.
Mubarak Ardol, general director of the Sudanese Mineral Resources Limited Co., said exports have ground to a halt, processing equipment has been damaged and the headquarters of several gold companies have been looted in the capital, Khartoum. Sudan officially exported 34.5 tons of gold worth over $2 billion last year.
But Ardol said it’s doubtful “even an ounce” has left the country since fighting between Sudan’s army and the paramilitary Rapid Support Forces broke out on April 15. More than 600 people have died and thousands more have been injured since, according to the World Health Organization.
Morocco’s most valuable metal miner, Managem, has halted production at its northeastern Wadi Gabgaba gold mine and also repatriated its workers, local media outlet Medias24 reported. The stock of the company fell by as much as 13.7% after the start of the violence, although it later recouped some of those losses.
Although both warring parties signed an agreement to protect civilians and facilitate the delivery of humanitarian aid last week in Jeddah, Saudi Arabia, fighting has continued to rage, according to interviews with residents and internal UN security documents seen by Bloomberg. System shuttered
Ardol, whose job is to regulate and enforce safety standards for the Sudanese gold market, said that while producers are still extracting gold ore, key processing sites have been destroyed by the conflict while the financial and customs systems have shut down.
“From upstream to downstream, all of it is now damaged,” he said by phone from Sudan. “People are not able to export due to the process of sending the money. The banks are closed, the central bank is closed, the refinery is not accessible.”
Gold is an important revenue source for Sudan’s government, via companies including Australia’s Perseus Mining and Russia’s Alliance for Mining Co. Ltd. But the vast majority of its production is smuggled out of the country, usually to foreign processing centers, according to Sudan’s finance ministry.
Both the RSF and the army have major stakes in Sudan’s gold industry and are accused by activists and rights groups of smuggling large amounts of illicit gold outside the country. The Russian mercenary company Wagner Group has also been linked to a gold processing facility north of Khartoum.
But it is unclear whether either side has been able to move the minerals out from remote air fields to fund their operations.
While the authorities in Khartoum stress the security forces control the country’s frontiers, “the smuggling of vehicles, alcohol, drugs, cosmetics and gold, as well as trafficking in arms and persons” is widespread across Sudan’s borders with South Sudan, the Central African Republic, Chad and Libya, a United Nations panel said in a report last year.
(By Simon Marks, with assistance from Souhail Karam)
Chile greenlights mining tax reform that boosts government take
SANTIAGO (Reuters) -Lawmakers in Chile’s lower house of Congress gave final approval on Wednesday for a long-awaited mining tax reform that now requires only the signature of leftist President Gabriel Boric, who has publicly backed it, to become law.
The reform will require large copper and lithium producers that operate in the mineral-rich Latin American nation to pay more taxes and royalties to the government.
Chile is the world’s top copper producer and No. 2 in lithium, both seen as key to making future fleets of electric vehicles powered by rechargeable batteries.
By a vote of 101 in favor to 24 against, lawmakers approved modifications to the tax and royalty bill endorsed by the Senate last week.
The lopsided vote was hailed by Finance Minister Mario Marcel, who underscored that the higher government take required of mining companies would address past abuses.
“With this legislation, we seek to avoid what happened many times with our country’s natural riches: they were exploited, they disappeared, which left very little for the country and its future development,” Marcel told reporters after the vote.
Under the reform, the top tax rate will reach up to nearly 47% for companies that produce over 80,000 tonnes of fine copper a year, considered high by the industry.
It also establishes a 1% ad valorem tax on copper sales from companies that sell more than 50,000 tonnes of fine copper, as well as an additional 8% to 26% tax depending on the miner’s operating margin.
Mining association Sonami expressed relief that the measure ended uncertainty over the type of reform lawmakers would ultimately adopt.
“Uncertainty lasted for almost five years and, without a doubt, hurt the country’s main productive activity,” Sonami said in a statement.
The association described the final legislative language as “better” than what was initially proposed by the government, giving credit to Marcel for enacting industry-friendly revisions.
Reporting by Fabian Cambero; Writing by Carolina Pulice; Editing by David Alire Garcia and Jamie Freed
Wreck of OS 35 Off Gibraltar Will be Removed in the Coming Weeks
OS 35 will be removed in the coming weeks in an intricate effort to lift the two sections of the hulk (Gibraltar Port Authority photo March 2023)
The Port of Gibraltar reports that plans are being finalized for the removal of the wreck of the bulker OS 35 with the operation slightly behind the anticipated schedule. They point out that it will be a variety of intricate operations to remove the wreck of the 584-foot bulker which has fully broken in two and sits on the sea floor nearshore.
The government of Gibraltar had established a deadline on May 30 for the removal of the wreck, but the contractor Koole has advised they are slightly behind schedule. They completed at the end of April the removal of the 33,632 tons of steel bar, which had been the cargo aboard the vessel when she was departing Gibraltar at the end of August 2022 and struck a gas carrier at anchor in the harbor. However, the contractors have also had to deal with storms including one earlier this year that caused the aft section of the wreck to shift and completed the separation between the two sections. They now anticipate the removal project will be completed on June 16.
“The works to remove the OS 35 are progressing well, but the reality of the state of the wreck is dictating the pace of operations. It is vital that every stage is completed in a way that is careful, deliberate, and safe,” said Captain of the Port, John Ghio, in the most recent update. “Whilst the short delay for its final removal is unfortunate, this is the only safe way to do so that mitigates the potential future source of pollution and minimizes the impact on the environment and Gibraltar’s coastline.”
The salvage team is preparing the wreck for removal through a series of steps. They have been drilling into the structure to create lifting points. Divers are also working their way through the wreck starting with the forward section to seal and test the compartments to make them airtight. These steps will help to lighten the load during the lift process. They started with the forward section and then will move to the aft sections making these preparations.
Drilling is underway to create lifting points in the hulk (Gibraltar Port Authority)
The provisional date for the removal of the aft section, which is planned to proceed first, is May 29. As the stern section was less damaged, they plan to reverse the process that was used last fall to lower the hulk to the sea floor and re-establish buoyancy on the stern section. It will be positioned alongside a semi-submersible barge before being lifted out of the water.
The forward section, which sustained additional damage when the OS 35 struck the gas carrier and after sinking to the sea floor, will entirely need to be physically lifted using the lifting points. Once it is clear, they plan to pass additional chains under the hull to reinforce stability and provide further control during the lifting process. They anticipate this will happen on June 2.
Efforts are also underway to finalize a tactical oil spill response plan anticipating that trapped oil residues will be released as the hulk is lifted and removed. They are planning to use booms around each section and the contractor reports they have oil spill response assets on site to deal with any potential oil release.
The lifting and removal operation and the potential for a release of oil are not anticipated to impact port operations. The teams however are conscious that it is happening during the beach season and are trying to limit the impact to the shoreline.
High-Seas Search for 39 Crewmembers of Capsized Chinese Fishing Vessel
Lu Peng Yuan Yu went missing in the Indian Ocean south of the Maldives - North Pacific Fisheries Commission photo
A multinational search is underway in the Indian Ocean for the crew of a Chinese fishing vessel that capsized with a crew of 39 aboard. China’s President Xi Jinping has ordered the departments of the Chinese government to launch the search while thanking international participants and welcoming their assistance.
The Australian Maritime Safety Agency (AMSA) was the first to detect the vessel’s distress reporting that they picked up the signal from a distress beacon early on the morning of May 16. An investigation determined that the distress signal was coming from the Chinese fishing vessel Lu Peng Yuan Yu 028, owned by Penglai Jinglu Fishery based in Shandong. The vessel’s last known position is said to be south of the Maldives with AMSA saying it was approximately 5,000 km (3,100 miles) northwest of Perth, Australia.
A bulk carrier, the Panama-flagged Navios Taurus (76,596 dwt) outbound from China to Brazil was in the area. AMSA reports that the bulker reached the area late yesterday. They reported finding an upturned hull and no signs of survivors.
The Lu Peng Yuan Yu 028 is reported to be 1,400 tons with the vessel’s registry with the North Pacific Fisheries Commission showing that it had a maximum crew of 60. China’s CCTV however is reporting that there are 17 Chinese, 17 Indonesian, and five Filipino crewmembers aboard the vessel currently. The database reflects the vessel as 229 feet in length. The AIS signal shows the vessel departed Cape Town, South Africa on March 3 with an ultimate destination of Pusan, South Korea entered into the AIS.
Informed of the incident, President Xi ordered an all-out rescue effort to be launched. A spokesperson for China’s Ministry of Foreign Affairs said during his daily briefing today that Xi Jinping asked the Foreign Ministry and relevant diplomatic missions to be in touch with their international counterparts to coordinate the rescue efforts. The resources of Australia, Sri Lanka, the Maldives, Indonesia, and the Philippines are all providing assistance or monitoring the situation.
“Chinese and foreign vessels have arrived at relevant waters and the search and rescue operation is intensively underway. More help is on the way. We will continue to work together with relevant sides to do everything possible to find those who have gone missing,” the spokesperson said in response to questions.
CCTV reports that two Chinese vessels were heading to the scene. The Australian Defence Force also sent a Poseidon aircraft to assist with the long-range search. AMSA also reports that other merchant ships and vessels are in the area.
The search was being hampered yesterday by extreme weather conditions according to AMSA with winds at up to 74 mph and seas at 23 feet. Conditions however have abated today with winds between approximately 25 and 30 mph and seas of approximately 6 to 10 feet.
China’s Ministry of Transportation reported as of midday Wednesday, nearly 20 hours after the distress beacon signal, no survivors have been located. They have also not found life rafts from the vessel.
President Xi called for improved early warning systems and other safety improvements for China’s distant deep-water fishing fleet. The operator of the vessel is reported to have a fleet ranging between 12 and 24 vessels operating in the North Pacific, Indian Ocean, and South America. China has the world’s largest fleet of distant-water fishing vessels with estimates at nearly 3,000 vessels.
Netherlands Tests Offshore Wind Farm Shutdown to Protect Birds
The Netherlands' energy ministry has tested out a novel approach to protecting migrating birds from any potential hazards posed by offshore wind turbines: briefly shutting down windfarms.
During a short four-hour nighttime test, the Borssele and Egmond aan Zee wind farms were shut down to bare minimum speed, allowing migrating seabirds to fly by with lower risk. According to energy minister Rob Jetten, the test was an "international first" for efforts to mitigate the impact of offshore wind farms on bird migration.
“Nowhere in the world are wind farms at sea shut down to protect birds during massive bird migration. We want to keep the impact of wind farms on nature as small as possible and we do this with this measure, among other things,” Jetten said.
Beginning this fall, the ministry plans to conduct shutdowns like these more frequently, using advance planning on bird migration patterns to minimize disruption to the power grid. With the right timing and advance notice, grid operators can balance out the shutdowns using other sources of power generating capacity. The owners of the wind farms will not be compensated for the lost income from the shutdown, according to Dutch media.
The impact of offshore wind farms on seabirds is difficult to assess, according to researchers with UC Santa Cruz, because dead seabirds from turbine strikes disappear into the water. However, the modeling for evaluating seabird populations and migratory movements is getting better, as well as the predictive modeling for bird strike risk.
“We’ve been studying these species for years, so we have a fair amount of information from surveys and tracking studies about what species are out there and where they go,” said Donald Croll, professor of ecology and evolutionary biology at UC Santa Cruz, in an interview last year. “We’ve also been developing population models that can be used to assess the impacts on seabird populations.”
The topic is an area of active study. In a well-publicized test conducted off Aberdeen in 2019-21, operator Vattenfall took radar-guided video footage of seabirds near a turbine for two years (during daylight hours only). In 10,000 recorded interactions in daytime, it found no instances of bird strikes or near-misses.
Danish energy company Orsted has secured a massive state subsidy contract for a carbon capture and storage plan. The scheme will take carbon dioxide from two biomass-fired powerplants in Denmark, liquefy the CO2 and ship it to Norway, where it will be injected into a subsea reservoir for permanent storage.
The subsidy contract offers roughly half of a $2.3 billion funding pool in return for carbon removal of 430,000 tonnes per year, starting in 2026 and running for at least 20 years. Orsted's bid for the tender won out over two competing offers.
Beginning in 2025, the Asnaes and Avedore combined heat and power plants will begin to capture and store biogenic carbon - that is, biologically-derived CO2 from biomass like straw and woodchips, the fuel sources for the two plants. The biogenic source is an important distinction for climate mitigation: by burning plant matter and capturing the carbon, the project effectively withdraws CO2 from the atmosphere, creating negative emissions.
Starting in 2026, the two units will capture and store about 430,000 tonnes of biogenic CO2 every year. Orsted hopes that the project will also provide the infrastructure for shipping out CO2 captured by other emitters as well.
"The decision is a giant step forward for the CCS industry in Denmark, as it is the first time in history a contract for full scale CCS has been awarded,” said Deputy Director of the Danish Energy Agency, Mogens Hagelskær.
The subsidy from the Danish state will help the project get up and running to launch a value chain for capture, transport and storage of CO2.
The project also draws together several commercial threads from the growing CCS sector to get to implementation and monetization. Orsted has hired Aker to deliver off-the-shelf carbon capture units with existing technology, and it will buy storage space for the carbon in the Equinor/Total/Shell offshore CO2 storage project, Northern Lights (itself subsidized by the Norwegian state).
These partnerships will save Orsted the difficulty of developing its own capture system and subsea storage reservoir. On the revenue side of the deal, Microsoft has agreed to purchase 2.76 million tonnes of carbon removal credits from Orsted over the span of 11 years, monetizing the negative emissions.
"Our landmark long-term agreement with Ørsted for high-quality carbon removal supports Microsoft’s commitment to become carbon-negative by 2030, sends a strong demand signal to scale the market, and showcases the power of partnership,” said Melanie Nakagawa, Chief Sustainability Officer at Microsoft.
China and India Compete for Influence in the Indian Ocean
Dredging and land reclamation works for the Chinese-backed CHEC Port City Colombo development in Sri Lanka (CHEC Port City Colombo Ltd.)
Home to almost two billion people, some of the world’s most dynamic economies, and important shipping routes, South Asia is a crucial geopolitical arena and the site of increasing rivalry between two of Asia’s biggest powers—China and India.
This growing competition manifests in many areas. Despite having much in common—as rising powers with nuclear weapons and large populations alongside a shared ambition of multipolarity—India and China regard each other with suspicion.
This has led the two countries to try and contain the influence of the other, and to compete to expand into new areas of regional strategic interest in South Asia and the Indian Ocean region.
For China, greater influence in South Asia supports domestic and foreign policy goals, specifically protecting access to world markets via the Indian Ocean region’s important global maritime routes.
Aiming to challenge India’s position as the regional naval hegemon, China’s People’s Liberation Army (PLA) Navy has also built up presence in the Indian Ocean.
Furthermore, using the ambitious Belt and Road Initiative (BRI), Beijing has strengthened relations in South Asia through infrastructure investments and greater connectivity via sea, road, and rail. This also supports China’s ambition of building a ‘community of common security’ in the neighborhood.
Most of India’s South Asian neighbors—aside from Bhutan—have joined the BRI, under which Chinese investment has grown considerably through soft power and hard power. Since 2018, China has committed or invested over $150 billion in the economies of Bangladesh, Maldives, Myanmar, Pakistan, Nepal, Sri Lanka and Afghanistan. China is now the largest overseas investor in Maldives, Pakistan, and Sri Lanka.
This has worried India, which fears that China may significantly impact its own sphere of influence and even encircle India with a ‘String of Pearls’, similar to Beijing’s fears of a ‘Malacca Dilemma’.
China’s establishment of a military base in Djibouti and the Sri Lankan authorities allowing a Chinese military surveillance ship to dock at Hambantota port have exacerbated these concerns. From India’s perspective, China’s growing influence in the region has placed them in competition, pushing it to reconsider its foreign policy and engagement in the region.
It has done this by implementing a ‘Neighborhood First’ Policy in South Asia. This policy is further supported by an ‘Act East’ Policy, under which India seeks to improve relations with Southeast Asian countries and the rest of the Asia-Pacific region.
Additionally, New Delhi has extended lines of credit to five countries in the region—Bangladesh, Maldives, Myanmar, Nepal, and Sri Lanka—and also invested in infrastructure, especially in energy and connectivity. To support these efforts, Indian conglomerates like the Adani Group have greatly increased their presence in Asia aided by concessional loans for ‘strategically important infrastructure projects abroad’.
Neither China nor India’s efforts to increase their spheres of influence are without challenges. For China, the BRI has faced significant criticism for its ‘predatory’ loans and for trying to legitimize China’s authoritarian model of government and economic development.
Some note that expanding trade deficits in China’s favor, alongside the absence of strong institutional mechanisms to protect borrowers and the scale of China’s lending, pose risks for countries accepting BRI investments.
Still others argue that fears of ‘debt trap diplomacy’ are exaggerated, noting that Chinese investment nearly always faces backlash, regardless of its terms.
India’s foreign policies have also come under scrutiny. Along with territorial disputes and New Delhi’s inconsistent regional engagement, there are concerns that India may co-opt regional cooperation mechanisms to try achieve regional hegemony in South Asia.
These fears are made worse by anti-India sentiment in parts of South Asia, including in Bangladesh and Nepal, where India has been credibly accused of meddling in domestic politics. For other countries like Bhutan, close relations with New Delhi have hampered attempts to strengthen bilateral ties with other countries.
This Sino-Indian competition in South Asia stands against a backdrop of systemic China-US competition. This unstable environment offers smaller South Asian countries—who might be concerned about an asymmetry of power in India’s favor in their bilateral relationships—opportunities to use offers from China to get a better deal with India, and vice versa.
However, this risks them being drawn into regional and global geopolitical rivalries, and could lead to pressure from all sides. After all, as the example of Nepal shows, achieving a balancing act is difficult. As it stands, the geopolitical landscape of South Asia is being decided by this increasing rivalry, and how these smaller powers navigate it deserves closer attention.
Genevieve Donnellon-May is a geopolitical and global strategy advisor on regional resources and environmental governance in Asia. She is the Asia-Pacific analyst at The Red Line podcast, a researcher at the Oxford Global Society, and a 2023 CSIS Pacific Forum young leader.
This article appears courtesy of The Strategist and may be found in its original form here.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.
Guardia Costiera Rescues Multiple Survivors From Flooding in Ravenna
Italy's coast guard has been hard at work responding to severe flooding in the country's northeastern Emilia Romagna region, near Ravenna.
After a monthslong drought, a massive storm dumped up to 20 inches of rain in less than two days this week. Nearly two dozen swollen rivers jumped their banks in Ravenna, Bologna, Faenza and surrounding areas. At least nine people have been killed by flooding and mudslides, and an unknown number are missing. According to regional president Stefano Bonaccini, a flood of equivalent scale has "never been registered before" in Emilia Romagna.
As of Wednesday, heavy rains were still falling. 13,000 people have been evacuated from the region as a precautionary measure, including dozens who were rescued by firefighters and other first responders, like the Guardia Costiera's aircrews and small boat crews.
In Ravenna, the Guardia Costiera rescued a pregnant woman from a flooded apartment complex by helicopter, one of nine rescue hoists conducted Wednesday morning. In Faenza, another helicopter aircrew rescued an elderly couple from the roof of their home (below).
Emilia Romagna would have been host to a Grand Prix race this coming weekend, but the flooding has forced organizers to cancel the event for safety reasons. In a statement, Formula 1 said that cancellation "is the right and responsible thing to do given the situation faced by the towns and cities in the region."
Attributing this storm (or any individual storm) to climate change is difficult, but 2022 was the hottest year on record in Italy, and warming temperatures are associated with extreme drought and heavy precipitation events. The Marche region was hit by heavy flooding last September after the worst drought in 150 years, and rising waters and landslides caused 12 fatalities and millions in damages.
America’s Newest Laker Loses Power and Briefly Grounds Near Detroit
Mark W. Baker lost power and maneuverability veering to the edge of the river (Youtube)
The U.S.’s newest laker, the first introduced in 35 years, had what the U.S. Coast Guard is calling an “electronics malfunction,” this morning causing her to ground in the Detroit River. The Mark W. Barker owned by The Interlake Steamship Company was refloated about four hours later but not before she had become a local tourist attraction and the attention of the media.
The 639-foot vessel loaded with 21,000 metric tons of salt departed from Cleveland, Ohio, and heading to Milwaukee, Wisconsin. She left port around 7:00 a.m. and according to one local observer, as she started to make a turn in the channel near Belle Isle, near Detroit, Michigan, she suddenly turned sideways and drifted to a stop on the river’s edge. The USCG reported she ran soft aground in the mud at the edge of the river.
As word of the grounding spread, news helicopters and reporters flocked to the river as well as residents. Many said it was the closest they had ever been to a big ship like the Mark W. Barker.
Spokesperson for the company Chrissy Kadleck told the Detroit News the ship “experienced a loss of power and maneuverability,” at about 7:30 a.m. this morning. “The vessel turned to port unexpectedly and the ship’s captain dropped the anchor before the bow grounded on the soft bank of the channel,” Kadleck told the newspaper.
The U.S. Coast Guard reported that river traffic was not impacted while they were working with the company and the Canadian Coast Guard on a rescue plan. A commercial towing vessel was brought in and at 12:10 p.m. the USCG said the ship was reported as freed from the mud. The decision was made to have the tug escort the Mark W. Barker to the Belle Isle anchorage.
Coast Guard investigators will be on the scene to asses any damages and ensure repairs are completed as necessary before the ship resumed its voyage. They said the ship remained stable during the incident and afterward there was no immediate sign of pollution.
Placed into service last summer, the vessel was built at Fincantieri Bay Shipbuilding in Sturgeon Bay, Wisconsin. She is The Interlake Steamship Company’s first newly built vessel since 1981 and is unique as a new U.S.-built laker.
It was the company’s second grounding incident in the Great Lakes in a month. In late April, one of the most historic vessels on the lakes, the 71-year-old Kaye E. Barkergrounded near Muskegon, Michigan on the eastern shore of Lake Michigan. She was also quickly freed with the authorities later blaming the incident on a build-up of sand in the river and the need to do further maintenance dredging near the harbor entrance.
