22 countries want to triple nuclear power. Is there enough uranium to go around?

Ines Ferré
·Senior Business Reporter
Sun, January 28, 2024 

Uranium has been hot this year, industry experts say. The trouble is there may not be enough to go around.

The squeeze on the metal, found in rocks and seawater, intensified recently after 22 countries, including the US, recently signed a pact at the UN Climate Change conference to triple their nuclear power capacity by 2050.

"There’s no other way to meet those net-zero carbon goals other than nuclear energy," said Nicole Galloway Warland, managing director of Thor Energy (THORF), an exploration company with projects in Utah and Colorado.

The backdrop to all this is, of course, is the march towards cleaner energy. But the rise of EVs and the anticipated power demands of artificial intelligence computing are also going to create a demand crunch for clean electricity — and nuclear is seen as a power source, unlike oil or coal, without the downside of carbon dioxide emissions.

That means the demand for uranium, the underlying fuel for nuclear plants, will be on the rise for years to come, experts and miners contend.

"Where is that uranium going to come from?," asked Galloway Warland. "There’s not enough to go around. There’s a supply deficit."

Earlier this month, the world's largest uranium miner, Kazatomprom (KAP.IL), warned it will likely not meet its production targets in the next two years because of mine construction delays and a lack of sulfuric acid needed for uranium production. Uranium prices shot up to 2007 levels this month, sitting above $106 per pound.

Uranium-related stocks have also been on fire.

Shares of Canadian giant Cameco (CCJ) have gained 83% over the past year. Kazatomprom, which trades on the London stock exchange, is up more than 60% over the past six months. Shares of US-based Energy Fuels (UUUU) are up about 25% during the same period.

Short on uranium? Geologists examine drilling samples at Wedding Bell Project in Colorado, a Thor Energy mining site. (Thor Energy)

'Uranium is becoming a household name'

A psychological shift surrounding nuclear is clearly helping fuel the market frenzy.

Nuclear power has been out of favor for years. But the Fukushima, Japan, nuclear disaster in 2011 prompted governments to scale back plans and shut down reactors. For much of the last decade, little investment went into the industry. Climate change, however, has changed attitudes.

"Nuclear power now has been realized as the new, vogue way of providing all this baseline power," Duane Parnham, executive chairman and CEO of Madison Metals (GREN.CN), told Yahoo Finance.

"Uranium is becoming a household name," he added.

Silicon Valley celeb billionaires, for example, have talked up the benefits of nuclear energy. Last year Sam Altman, the chief executive behind ChatGPT, announced his special purpose acquisition company would take nuclear energy startup Oklo public. And, of course, Tesla (TSLA) CEO Elon Musk weighed in. He tweeted last year that "The world should increase use of nuclear power!"

In the United States, the shortage is complicated by the fact that much of our uranium is imported from Russia. That's prompted the Biden Administration to seek more supply internally, and from US-friendly states such as Canada, the second-largest producer.

"The US has extensive in-ground uranium resources and quite a bit of idled processing capacity. But we have let our industry and infrastructure atrophy over the past few decades, as nuclear utilities bought cheaper uranium from places like Russia and Kazakhstan," Curtis Moore, senior vice president of marketing at Energy Fuels, told Yahoo Finance.

Now the US is playing catch-up. New uranium mines can take five to 15 years from start to finish, including permits, says Thor Energy's Galloway Warland.

"All of a sudden you’ve got no exploration, you’ve got a lot of old mines coming to the end of their life, you've got geopolitical tensions," said Galloway Warland. "We need to have more exploration, we need more mines coming online."

The Inflation Reduction Act (IRA) passed last year includes a tax credit to help preserve the existing fleet of nuclear plants and tax incentives for advanced reactors. But the IRA also earmarked $700 million to support the development of a domestic supply chain for high-assay low-enriched uranium, commonly referred to as HALEU. The funding is intended to help eliminate US dependence on Russia for nuclear fuel supply.


As for investors, the question is always whether a spike in demand is a big yellow caution flag.

Said Curtis of Energy Fuels: "Prices have skyrocketed, but we don’t think it is a bubble, as the price increases are based on real market fundamentals." He added, "We are likely in the beginning of a multiyear period of elevated uranium prices that will persist for several years until large mines around the world can get into production."

However, some industry watchers are more cautious.

"We’re in a little bit in a bubble in the sense that making this commitment to build this capacity is not realistic. It’s aspirational, but not everybody who signs up to this agreement is well situated to make this happen," said Irina Tsukerman, president of market research and geopolitical risk advisory Scarab Rising.

"It’s possible that there could be disruptions to this process of nuclearization in the future. All it takes is one government changing its position and pulling out, and that’s it," she said.

Colorado site of Thor Energy mining project. (Thor Energy)

Bubble or no bubble, the US and other countries are going full force into nuclear. Uranium is expected to stay in high demand, at least until supply catches up.

"We’ve got 60 reactors being built around the world. A hundred more being permitted," Dave Nadig, VettaFi financial futurist, recently told Yahoo Finance. "It’s really going to be a boom era."

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.

Mexico confirms some Mayan ruin sites are unreachable because of gang violence and land conflicts

MARK STEVENSON
Updated Sat, January 27, 2024 

A view of the archaeological site Yaxchilan in Chiapas state, Saturday, July 9, 2022.

 (AP Photo/Eduardo Verdugo)

MEXICO CITY (AP) — Mexico’s government has acknowledged that at least two well-known Mayan ruin sites are unreachable by visitors because of a toxic mix of cartel violence and land disputes.

But two tourist guides in the southern state of Chiapas, near the border with Guatemala, say two other sites that the government claims are still open to visitors can only be reached by passing though drug gang checkpoints.

The explosion of drug cartel violence in Chiapas since last year has left the Yaxchilán ruin site completely cut off, the government conceded Friday.

The tour guides, who spoke on condition of anonymity because they must still work in the area, said that gunmen and checkpoints are often seen on the road to another site, Bonampak, famous for its murals.

They say that to get to yet another archaeological site, Lagartero, travelers are forced to hand over identification and cellphones at cartel checkpoints.

Meanwhile, officials concede that visitors also can't go to the imposing, towering pyramids at Tonina, because a landowner has shut off across his land while seeking payment from the government for granting the right of way.

The cartel-related dangers are the most problematic. The two cartels warring over the area's lucrative drug and migrant smuggling routes set up the checkpoints to detect any movement by their rivals.

Though no tourist has been harmed so far, and the government claims the sites are safe, many guides no longer take tour groups there.

“It’s as if you told me to go to the Gaza Strip, right?” said one of the guides.

“They demand your identification, to see if you're a local resident,” he said, describing an almost permanent gang checkpoint on the road to Lagartero, a Mayan pyramid complex that is surrounded by pristine, turquoise jungle lagoons.

“They take your cellphone and demand your sign-in code, and then they look through your conversations to see if you belong to some other gang,” he said. “At any given time, a rival group could show up and start a gunbattle.”

The government seems unconcerned, and there is even anger that anyone would suggest there is a problem, in line with President Andrés Manuel López Obrador's policy of playing down gang violence — even as the cartels take over more territory in Mexico.

“Bonampak and Lagartero are open to the public,” the National Institute of Anthropology and History said in a statement Friday.

“It is false, biased and irresponsible to say that these archaeological sites are in danger from drug traffickers,” added the agency, known as the INAH, which claimed it “retains control of the sites.”

Both guides stressed that the best-known Mayan ruin site in Chiapas, the imposing temple complex at Palenque, is open and perfectly safe for visitors. But starting around December, tourists have canceled about 5% of trips booked to the area, and there are fears that could grow.

Things that some tourists once enjoyed — like the more adventurous trip to ruins buried deep in the jungle, like Yaxchilán, on the banks of the Usumacinta river and reachable only by boat — are either no longer possible, or so risky that several guides have publicly announced they won't take tourists there.

Residents of the town of Frontera Comalapa, where the boats once picked up tourists to take them to Yaxchilan, closed the road in October because of constant incursions by gunmen.

Even the INAH admits there is no access to Yaxchilan, noting that “the institute itself has recommended at certain points that tourists not go to the archaeological site, because they could have an unsuccessful visit.” But it said that the problems there are “of a social nature” and are beyond its control.

Cartel battles started to get really bad in Chiapas in 2023, which coincides with the uptick in the number of migrants — now about a half-million annually — moving through the Darien Gap jungle from South America, through Central America and Mexico to the U.S. border.

Because many of the new wave of migrants are from Cuba, Asia and Africa, they can pay more than Central Americans, making the smuggling routes through Chiapas more valuable. The problem now seems to be beyond anyone's control.

The National Guard — the quasi-military force that López Obrador has made the centerpiece of law enforcement in Mexico — has been pelted with stones and sticks by local residents in several towns in that region of Chiapas in recent weeks.

The other tour guide said that was because the two warring drug cartels, Sinaloa and Jalisco, often recruit or force local people to act as foot soldiers and prevent National Guard troopers from entering their towns.

In Chiapas, residents are often members of Indigenous groups like the Choles or Lacandones, both descendants of the ancient Maya. The potential damage of using them as foot soldiers in cartel fights is grim, given that some groups have either very few remaining members or are already locked in land disputes.

The guide said the ruin sites have the added disadvantage of being in jungle areas where the cartels have carved out at least four clandestine landing strips to fly drugs in from South America.

But the damages are mounting for the Indigenous residents who have come to depend on tourism.

“There are communities that sell handicrafts, that provide places to stay, boat trips, craftspeople. It affects the economy a lot,” said the first guide. “You have to remember that this is an agricultural state that has no industry, no factories, so tourism has become an economic lever, one of the few sources of work."

Greta Thunberg joins hundreds marching in England to protest airport's expansion for private planes

Associated Press
Sat, January 27, 2024 


In this photo issued by Extinction Rebellion UK, climate activist Greta Thunberg takes part in a march to Farnborough Airport in southern England, Saturday Jan. 27, 2024. Greta Thunberg joined the march to protest the use of private jets and the expansion of an airport. Hundreds of local residents and activists holding banners and placards took part. 

(Jonathon Vines/Extinction Rebellion UK via AP)

LONDON (AP) — Climate activist Greta Thunberg joined a march in southern England on Saturday to protest the use of private jets and the expansion of an airport.

Hundreds of local residents and activists holding banners and placards that read “Ban Private Jets" marched to Farnborough Airport, which mostly serves private aircraft. Some beat drums while others lit pink smoke flares.

The airport, located in Hampshire County about 40 miles (64 kilometers) southwest of London, applied last year to increase its maximum number of flights from 50,000 to 70,000 a year.

Groups working to fight climate change, including the organizer of Saturday's protest, Extinction Rebellion, say private jets are much more polluting than commercial passenger airliners. Flights to and from Farnborough Airport carried an average of 2½ passengers per flight in 2022, the group said.

“It is clear that private jets are incompatible with ensuring present and future living conditions on this planet," Thunberg said in a video that Extinction Rebellion posted on social media.

“We’re not going to let this continue. We're not going to let the rich few who are responsible for the majority of aviation emissions get away with sacrificing people and the planet,” she added.

Farnborough Airport said that it was an important hub for business and corporate travel, and that it recognized the importance of reducing its environmental impact.

“The airport’s environmental footprint is a fraction that of a traditional commercial airport, yet it serves as one of the largest employment sites in the region," it said in a statement.

Thunberg, 21, a Swedish environmental campaigner who inspired a global youth movement against climate change, is expected to appear at a court in London next week to face a public order offense charge. She was arrested in October during a demonstration against a major oil and gas industry conference.

Thunberg was among the activists who were charged for seeking to block access to the Energy Intelligence Forum. She denied the charge.

Plymouth: Medics lead die-in protest over fossil fuels

Jonathan Morris - BBC News
Sat, January 27, 2024 

Doctors, nurses, physiotherapists and psychologists took part in the performance in which they tended to the shrouded "dead" and laid flowers


Health professionals led a die-in protest in a call for an end to investment in fossil fuels.

Medics from the South West took their campaign to Plymouth city centre "to highlight the terrible impact of the climate emergency on people's health".

Doctors, nurses, physiotherapists and psychologists took part in the protest in which they tended to the shrouded "dead" and laid flowers.

A mock inquest then heard how climate change had contributed to these.

The action included climate campaigners Extinction Rebellion,

The action by an estimated 60 people including climate campaigners Extinction Rebellion, follows a report in a leading medical publication about how climate change is severely impacting people's health around the world.

Physiotherapist Alice Clevely, from Bristol, said: "We're telling people about how people are dying when they don't need to because of the way fossil fuels are warming the planet.

"Because we are there to look after people for their health and their wellbeing, we feel we have a duty of care to our patients and to the general public to warn about how the climate crisis is interacting and affecting people's health at a population level as well as an individual level."

Medics said they have a "duty of care" to warn about the climate crisis and its effects on health

Oil Tanker and Container Shipping Rates Hit Record Highs

By ZeroHedge - Jan 26, 2024

• Shipping rates for clean tankers and containers have reached nearly $100,000 per day due to disruptions in the Red Sea.
• 
  
• The blockage has led to increased freight costs, particularly for oil and container shipments, impacting global trade routes.
• 
  
• This situation has resulted in inflationary pressures and concerns about the sustainability of current shipping rates and the potential impact on the global economy
• 
  

One month ago, when it first became apparent that the Red Sea blockage by Iranian proxies would prove to be a prolonged affair, we warned that "Red Sea Blockage Means A New Round Of Surging Cost-Push Inflation", which got confirmation just a few days later when we showed the sudden spike in container shipping rates that used the Suez Canal as a transit choke point.

That, as we strongly suspected, was just the beginning, and according to Bloomberg, a key Clean Tanker rate tracked by the Baltic Exchange, has exploded to almost $100,000 a day on the Red Sea disruptions.

Specifically, the cost of shipping fuel on a route that mostly hauls naphtha from the Middle East to Japan surged (again) on Wednesday, with the daily charter earnings climbing 18% to $98,000/day, the highest since May 2020. Meanwhile, earnings for smaller ships sailing from the Middle East to Japan route rose 22% to $75k/day, also the highest since May 2020.

The charts of the day from the latest Goldman Oil Tracker (full report available to pro subscribers in the usual place) shows something similar, if slightly less dramatic: the first shows that oil flows through the Bab-El-Mandeb continue to deteriorate, and remain down 1.2mb/d (or 20% on a 14DMA Basis) since disruptions started on December 18th, 2023 and down 2.4mb/d (or 33%) from the pre-disruption 2023 average.

At the same time, Goldman's indices of global freight rates for clean and dirty oil tankers have risen 1$/bbl (16%) and 0.8$/bbl (25%), respectively since the disruptions began. The impact of Red Sea disruptions on volumes through the Red Sea and on freight rates is significantly larger for containers transporting goods than for oil tankers (and certainly for US and European ships than for Chinese and Russian ones).

Paradoxically, the more moderate impact on oil flows reflects the lower physical risk from a Red Sea journey - as many oil tankers are from Russia and the Middle East, both of which are on the Houthi "friendly" list - and a greater cost of delaying the delivery through a longer alternative journey.

The bottom line is that the Red Sea blockage is - despite the best wishes of cecntral bankers everywhere who can't wait to start cutting rates ahead of the record avalanche of elections this year - becoming a huge inflationary headache for global freight. Furthermore, as LoadStar reports, container spot rates from Asia to the US and Europe continued to soar this week as any solution from the toothless (both literally and metaphorically) Biden regime to the attacks on shipping by Houthi rebels looks increasingly unlikely.

Moreover, reports to The Loadstar suggest that some shippers of low-rated contract cargo are seeing their allocations slashed by up to 80% by their carriers, forcing them onto the spot market.

Xeneta’s XSI Asia-North Europe spot component jumped 25%, for an average of $4,612 per 40ft, representing a month-on-month increase of nearly 200%.

However, for shipments before the Chinese New Year, which commences on 10 February, some carriers are touting rates in excess of $10,000 per 40ft. One UK-based NVOCC director told The Loadstar he had decided only to ship his most urgent boxes before CNY, on the basis that rates should go down in the traditionally slack period following the holiday.

“The lines have plenty of ships and demand is still not that strong, so once the longer transits get baked into their schedules, I can’t see any reason why rates would stay high,” he said.

Meanwhile, Mediterranean shippers are not only facing huge delays in containers arriving from Asia, but are seeing the cost of spot freight rates leap to more than $6,500 per 40ft, from $2,300 at the end of December.

Elsewhere, transpacific spot rates from Asia to North America are “out of control”, according to a UK forwarder contact currently in Shanghai.

“The lines are charging what they like at the moment, whether that is to the west or east coast, the market has been taken over by a return of the pandemic ‘fear factor’ of not getting product shipped,” said the forwarder.

Unfortunately, it's only getting worse as transpacific carriers are still in the process of raising their rates, with further FAK (freight all kinds) hikes planned for 1 and 15 February.

Drewry’s WCI Asia to US west coast spot shot up 38% this week, to an average of $3,860 per 40ft, while its east coast spot climbed 35%, to $5,644 per 40ft, respectively 88% and 64% higher than for the same week of last year.

Vespucci Maritime’s Lars Jensen commented: “It would appear that the carriers’ ability and shippers’ de facto willingness to accept steep increases matches the behaviour we saw in the pandemic.”

The silver lining is that for now at least, the contagion has not spread to transatlantic spot rates, which were mostly flat this week, with the XSI North Europe to US east coast spot stuck at a lowly $1,432 per 40ft (but climbing ever so gradually. And indeed, according to The Loadstar’s contacts, there are “big increases in the pipeline” that will kick in next month.

“With the crazy rates the lines are getting elsewhere I can’t see that the carriers will accept the current transatlantic rates for much longer,” said a Liverpool-based forwarder contact.

By Zerohedge.com

Shell To Convert German Refinery To Base Oil Manufacturing

By Charles Kennedy - Jan 26, 2024

Shell plans to convert its oil refinery at the Wesseling site in Germany into a production unit for base oils, the UK-based supermajor said on Friday.

Shell Deutschland GmbH has taken a final investment decision (FID) to turn the Wesseling site at the Energy and Chemicals Park Rheinland into a manufacturing facility for Group III base oils, used in making high-quality lubricants such as engine and transmission oils. 

Crude oil processing will end at the Wesseling site by 2025 but will continue at the Godorf site at the Rheinland park, Shell said in a statement.

Shell’s Energy and Chemicals Park Rheinland near Cologne is comprised of the Wesseling and Godorf sites. The park currently has the capacity to process over 17 million tons of crude oil a year, of which 7.5 million tons are processed at the Wesseling site.  

The Wesseling base oil plant is expected to start operations in the second half of this decade. It will have a production capacity of around 300,000 tons per year, which would be equal to around 9% of current EU demand and 40% of Germany’s demand for base oils.

The high degree of electrification of the new base oil plant, as well as the ceasing of crude oil processing at the Wesseling site, is expected to reduce Shell’s Scope 1 and 2 carbon emissions – those which come directly from operations and those from the energy to run said operations – by around 620,000 tons annually.  

“This investment is part of Shell’s drive to create more value with less emissions,” said Huibert Vigeveno, Shell’s Downstream and Renewables Director.

Over the past few years, Shell has divested several refineries globally, including the sale of the Martinez Refinery in California to PBF Holding Company, and the sale of its 50% stake in the 340,000-barrels-per-day Deer Park Refinery in Texas to its joint venture partner Pemex.

 

Can China Use Offshore Wind to End Reliance on Foreign LNG and Coal?

And could that make Beijing more open to risk-taking, including vis-à-vis Taiwan?

File image courtesy Mingyang Smart Energy

PUBLISHED JAN 28, 2024 3:25 PM BY THE LOWY INTERPRETER

 

[By Joseph Webster and Zoe Leung]

A worldwide scramble for energy supplies following Russia’s invasion of Ukraine has intensified China’s quest for energy security. The nation is doubling down on all forms of domestic energy generation – from coal to renewables – to lessen reliance on imports.

Major energy exporters to China, including the United States and Australia, have every reason to keep an eye on Chinese offshore wind development. China’s wind-generated power will significantly reduce and potentially eliminate its reliance on Australian thermal coal but is much less likely to remove China’s liquefied natural gas (LNG) needs.

China’s offshore wind push

China’s primary energy policy objectives are security of supply and affordability, both of which have been affected by worldwide energy shortages triggered by surging post-Covid demand and supply disruptions from Russia’s invasion of Ukraine. Offshore wind electricity production is generated domestically, lessening China’s dependency on imported energy, especially as Chinese firms are dominant throughout wind supply chains.

Chinese offshore wind production enjoys strong economic and technical fundamentals. China’s southern coastal provinces have some of the world’s strongest offshore wind speeds. These provinces have comparatively high electricity prices yet relatively weak solar and onshore wind potential, and are far from domestic coal and natural gas production. Finally, China’s lavishly subsidized turbine manufacturing, shipbuilding, and steelmaking industries synergize with offshore wind.

But the push to develop offshore wind also has political elements.

China’s unrelenting offshore wind push supports China’s dual circulation strategy to shield its economy from external shocks while boosting indigenous innovation. Offshore wind generation is prominent in China’s current five-year plan lasting to 2025, which calls for mastering deepwater wind technologies and developing low-frequency power transmission systems to facilitate high-capacity offshore facilities. It also sets guidelines for large-scale offshore wind turbine demonstration projects. The development is also central to the country’s plan to build a “new energy system”, which highlights this decade as a period of “accelerated transition” on the way to China’s 2045 and 2060 goals.

These plans incentivize Chinese coastal jurisdictions to develop their offshore wind potential. Building local power generation is highly attractive to municipal governments, which own the rights to develop maritime resources. Moreover, local production leaves them less dependent on other provinces for electricity – and therefore less vulnerable to China’s extremely fraught inter-provincial power trade.

Coal imports are on the way out – LNG is here to stay

China’s offshore wind industry is massive, poised to grow further, and will enable coastal regions to displace coal consumption – and imports.

In 2022, coal accounted for 55 percent of China’s primary energy consumption and 61 percent of its overall electricity mix. China is also largely self-sufficient in metallurgical coal used for steelmaking but imports the thermal coal used for electricity generation, especially in southern provinces.

China’s offshore wind development will, all things being equal, reduce its needs for imported and domestically produced thermal coal for electricity generation. This will be especially true during winter, when China’s offshore wind speeds and generation peak.

Interestingly, China has also stockpiled record levels of coal, with inventories tripling in the past two years, according to Australia’s Department of Industry, Science and Resources. China’s development of offshore wind and other renewables, as well as its stockpiling of coal inventories, may enable it to zero out coal imports much faster than many anticipate. A 2021 Australian National University paper by Jorrit Gosens, Alex Turnbull, and Frank Jotzo predicting reduced Chinese overseas coal imports appears highly prescient.

China’s offshore wind electricity generation will reduce thermal coal consumption, pollution and carbon dioxide emissions. These are highly positive developments.

At the same time, and less favorably, China’s development of offshore wind and other renewables will lessen its reliance on energy imports. Consequently, Beijing might become more risk-seeking, including vis-à-vis Taiwan.

Offshore wind could also impact China’s natural gas imports, as coastal provinces that rely on LNG for power generation will, all things being equal, reduce imports as offshore wind generation rises. Offshore wind electricity generation cannot replace all of China’s natural gas demand, however. Industry and heating comprised 42 percent and 33 percent of Chinese natural gas consumption in 2022; electricity accounted for only 17 percent. Meanwhile, LNG accounted for 25 percent of all Chinese natural gas consumption in 2022.

Moreover, China is building dozens of gigawatts of new gas-fired baseload power capacity along coastal provinces, along with new LNG import terminals, suggesting LNG for power burn could rise, at least over the medium term. While Chinese natural gas data is not transparent, offshore wind electricity generation cannot by itself eliminate LNG imports.

Renewables, heat pumps, and clean hydrogen could – and likely will – eventually eliminate China’s LNG demand, but these developments are very far off, for now, barring a dramatic policy shift.  

In sum, China’s offshore wind buildout is beneficial for the climate, yet it will also lessen Beijing’s reliance on hydrocarbon imports from Australia and the United States. Offshore wind will notably limit China’s exposure to Australia’s thermal coal exports. Western policymakers should continue to closely monitor Beijing’s energy security strategy for signs of potential aggression against Taiwan.

This article represents the authors’ personal opinions.

Joseph Webster is a senior fellow at the Atlantic Council’s Global Energy Center, where he leads the center’s efforts on Chinese energy security and specialises in energy geopolitics.

Zoe Leung is the former senior director of research at the George H. W. Bush Foundation for US-China Relations. 

This article appears courtesy of The Lowy Interpreter and may be found in its original form here.

Uzbekistan Eyes Deepened Economic, Energy, and Security Ties with China

By RFE/RL staff - Jan 26, 2024

• Mirziyoev praises China's economic model and seeks to deepen ties, focusing on green energy projects, science, and boosting tourism.
• 
  
• The visit follows significant global and regional developments, including the war in Ukraine, influencing Uzbekistan's approach to China as a stable political and economic partner.
• 
  
• Investment in renewable energy and electric vehicles are key areas of interest, reflecting China's global leadership in these sectors and its strategic BRI investments.
• 
  

Uzbek President Shavkat Mirziyoev is in Beijing to meet with Chinese leader Xi Jinping for a high-profile state visit intended to lay the groundwork for strong ties between the two countries.

In an article signed by Mirziyoev that appeared in Chinese state media ahead of the trip, the Uzbek leader praised China’s model of economic development and said relations between the two countries are experiencing “new historical heights” that will allow him to use the January 23-25 trip to “develop a new long-term agenda” for the two countries that will last for “decades.”

"Every time I visit China, I sincerely admire the scale of the reforms taking place here, the accomplishments, creative strength, diligence, and talent of the Chinese people who are confidently pursuing the path of modernization to realize their centuries-old dream,” the article said.

The state visit comes following the first in-person China-Central Asia leaders’ summit in May where China inked several agreements to deepen its economic and security links with the region. In Beijing, Mirziyoev is looking to build upon those deals as well as a comprehensive strategic-partnership agreement signed in 2022.

While meeting with Xi and other top-level Chinese officials, the Uzbek delegation will look to court investment and agree with their counterparts on how to bring many previously signed deals to fruition, from developing green energy projects to cooperation in science and boosting tourism between China and Uzbekistan.

“This is less about concrete outcomes and more about setting a road map for the future,” Niva Yau, a fellow at the Atlantic Council's Global China Hub, told RFE/RL. “China has committed to investments and projects and this high-level visit is [about] how to achieve them and to search for new areas to cooperate together.”

Evolving Ties

The visit takes place against the backdrop of several major developments that have changed the political environment at home and abroad for Uzbekistan’s relationship with China.

Russia’s 2022 full-scale invasion of Ukraine has boosted China’s standing as a reliable political and economic force for the countries of Central Asia as Moscow -- the region’s traditional dominant partner -- has grappled with financial and geopolitical fallout from the conflict.

After a decade of infrastructure investments around the globe through Beijing’s multibillion-dollar Belt and Road Initiative (BRI), China wants to use the project to invest in new sectors and become a more strategic lender after facing criticism for a lack of transparency in BRI loans as it now grapples with a slowing domestic economy.

Facing such headwinds, China is looking to make the BRI smaller and greener through more risk-averse loans and investments in renewables, and Yau said this could factor into the results from Mirziyoev’s visit.

China, she notes, has been investing heavily in environmental and scientific research and monitoring, with several notable investments in Central Asia.

Tajikistan, which neighbors Uzbekistan to the southeast and shares a border with China, opened a Chinese observation station on Lake Sarez in 2021, reportedly for environmental research and “international disaster reduction and prevention,” according to the Chinese Academy of Sciences.

In July 2023, Chinese researchers also unveiled a new “super” observation post for climate and environmental monitoring in Shahritus, near the meeting point of China's borders with Uzbekistan and Afghanistan.

The stations have scientific and technological applications, but observers note the installations are part of a broad network of similar stations across BRI countries in South and Central Asia that could have dual applications for security and surveillance.

Beijing has also looked to expand the list of countries cooperating with its space program, reaching an agreement with Turkmenistan in 2023.

While traditional Chinese investments in Central Asia are still in play, such as a proposed natural gas pipeline from Turkmenistan to China and a railway connecting China to Kyrgyzstan and Uzbekistan, their futures are uncertain.

Yau said Beijing is looking to bring these new areas of investment and industry that it has expanded elsewhere in the world to Central Asia, and Uzbekistan, with a population of some 35 million, is an attractive partner.

One particular sector of interest is renewable energy and opening up new markets for Chinese electric vehicles.

China has been positioning itself as a market leader around the world for years and, in December, China’s Henan Suda signed a deal with the Uzbek Energy Ministry to build some 50,000 charging stations for electric vehicles around the country by 2033.

“These are areas where China is becoming a global leader and it wants to bring them to Central Asia,” Yau said.

New President, New Era

While events like the war in Ukraine have affected the relative appeal of Beijing and Moscow as partners for Central Asia, Mirziyoev’s high-profile visit is the product of years of warming ties between China and Uzbekistan, says Temur Umarov, a fellow at the Carnegie Russia-Eurasia Center in Berlin.

“This direction towards China has been Mirziyoev’s priority from the beginning,” he told RFE/RL. “Mirziyoev is very interested in China and often quotes [former Chinese leader] Deng Xiaoping in his speeches; and he clearly sees the country as an example for how to develop economically.”

China’s experience combating top-level corruption under Xi and its efforts to lift millions out of poverty, Umarov says, have been a particular focus for the Uzbek leader since he came to power in 2016 following the death of Islam Karimov, the country’s first ruler after the collapse of the Soviet Union in 1991.

“China has become a source of knowledge in a way for Mirziyoev,” Umarov said. “Given that Uzbekistan is a personalistic regime, how he sees China matters a lot.”

Uzbekistan followed a far more isolationist foreign policy under Karimov that was suspicious of outside influence.

China was still an important partner, with Chinese leader Hu Jintao inviting Karimov to Beijing for a visit in 2005 less than two weeks after the bloody crackdown against protesters in the northeastern Uzbek city of Andijon, though the relationship was limited. Under the hard-line Karimov regime, Chinese companies and capital in many sectors of the economy were restricted.

That changed following Karimov’s death, which brought Mirziyoev to power.

As the new Uzbek president has opened up his country’s economy, China has been both a reliable source of investment and a valuable ally that has helped Mirziyoev build his legitimacy at home and abroad.

As Umarov notes, China’s own model of opening its economy while retaining tight political control is one that looks increasingly appealing to Mirziyoev.

“This is very relevant to him as he tries to build his own political regime based on Karimov's heritage,” Umarov said. “He knows that he needs to adapt to the world and learn from similar regimes about how to navigate the complex realities of today.”

By RFE/RL