The China Signal - December 17
JCHX enters Colombian copper project, BYD in Chile and Mexico, Argentina drops pursuit of Chinese fighter jets
G’day, and welcome to The China Signal. This week, JCHX Mining Management buys a stake in a major Colombian copper mining project; BYD activity in Chile and Mexico; Argentina drops pursuit of Chinese fighter jets; demand for Brazilian commodities increases; plus much more. Read on.
But first, please welcome our two new interns and contributors, Victoria Vogrincic (VV) and Nohelia Rivera Matias (NRM)! Both have an extensive academic background in China-Latin America research, and are eager to deepen their expertise and exposure as they begin their careers. They join Richard Puppin (RP). Please reach out and connect with them!
Critical Minerals ⚒️ 🔋
Colombia 🇨🇴
On Thursday 8 December, the Canada-based Cordoba Minerals Corp. announced that it has entered a strategic arrangement with JCHX Mining Management to jointly develop the company’s flagship Alacran copper-gold-silver project in Colombia. JCHX is a leading mining construction company in China (and currently a 19.9% shareholder of Cordoba).
As part of the arrangement, JCHX will purchase a 50% ownership interest in the Alacran project for a total consideration of US$100 million, making Cordoba Minerals and JCHX joint venture partners on the project. (The Alacran project is part of the broader San Matias copper-gold-silver project complex.)
…JCHX will advance a bridge loan of US$10 million in cash to Cordoba, which is expected to be funded [by year end].
[…With a production of around 31,000 tonnes per annum] …the Alacran project is positioned to be the largest copper mine in Colombia in the near future. Declared a “Project of National Interest” by the Colombian government in 2018, the Alacran mine is expected to generate US$190.4 million in government royalty revenue plus US$514.2 million in income tax revenue to support government and social programs in Colombia and local communities. (RP)
Colombia signs agreement to establish a national mining company | Mining.com | December 13, 2022
On Monday 12 December, the Colombian government, and two local state-controlled organizations signed a Memorandum of Understanding (MoU) to create a national mining company to tackle mining-related pollution, and help small-scale miners.
The memorandum of understanding was signed by Colombia’s Ministry of Mines and Energy, the National Mining Agency (ANM), and the Special Assets Society (SAE), a government fund which manages assets seized from illegal groups to compensate victims of Colombia’s internal armed conflict.
The new national mining company will reportedly focus on minerals such as copper and gold. No further details were disclosed about their operational timeline. (RP)
Mexico 🇲🇽
Mexico to start producing lithium batteries in late 2023 | Mining.com | November 25, 2022
Mexico, which nationalized lithium resources earlier this year (see TCS April 23), plans to start producing lithium batteries in late 2023 after securing much-needed private US, Chinese, and South Korean investment (see TCS September 9), said Marcelo Ebrard, Mexico’s Minister of Foreign Affairs to local paper La Jornada.
Lithium reserves in the country include China’s Ganfeng Lithium-owned Sonora mine, whose value was recently estimated at US$600 billion by Mexico’s Ministry of Finance. (RP)
Electric Vehicles 🚗 🔌
Chile 🇨🇱
China’s BYD could invest billions in Chile lithium supply chain, says regional chief | Bnamericas | December 12, 2022
Chinese electric vehicle manufacturer BYD is looking to invest billions of dollars in Chile to develop a battery materials supply chain. According to Stella Li, Executive Vice President of BYD and President of BYD América, BYD is in talks with the Chilean government about building a lithium cathode plant, as well as investing in a domestic lithium mining project to extract lithium reserves in the Atacama salt flat in the north of Chile. It is actively applying for permits to process the raw material into cathodes for batteries.
Chile has shown interest in developing a state lithium company for some time, as it contains the biggest lithium brine reserves in the world. Chilean President Gabriel Boric wants to create a national lithium company, tweeting last December that "Chile cannot again commit the historic mistake of privatizing resources and for that we will create the National Lithium Company…"
The only companies currently authorized to mine in Chile are Sociedad Quimica y Minera de Chile (SQM) and U.S. company, Albemarle (ALB).(VV)
Mexico 🇲🇽
On Tuesday 29 November, Chinese electric-vehicle maker BYD said it will launch its cars in Mexico by the end of 2023, with the company’s country head, Zhou Zou, pegging its sales target at up to 30,000 vehicles in 2024.
For background on BYD, see TCS April 8.
BYD opened a store in Brazil in November (TCS November 21), received an order for 1,000 EV taxis in Mexico (TCS May 1) and delivered electric buses to Bogota in April (TCS April 8), and announced an EV taxi agreement in Chile in January 2021 (TCS January 22, 2021). (RP)
Defense ✈️
Argentina 🇦🇷
Argentine President Alberto Fernandez announced on December 7 it was no longer looking to purchase military aircraft, putting a halt on the $684 million project begun in 2021 to upgrade the nation’s aging air force fleet.
In May 2021, a Chinese delegation visited Argentina hoping to secure a deal to supply the Argentines with twelve of its JF-17 fighter jets (see TCS May 7, 2021 & TCS May 13).
Earlier this year, a delegation of Air Force pilots and technicians from Argentina evaluated the JF-17 in China, while in June the head of Argentina’s joint military staff visited Pakistan, further increasing speculation that Argentina was likely to go with the joint Chinese-Pakistani JF-17. (VV)
Agriculture 🌾
Brazil 🇧🇷
More than two years after China re-entered their market, U.S. corn exporters are finally being displaced by Brazilian ones as the No. 2 exporter’s shipments to China are set to explode this month…
According to the shipping lineup from Williams Shipping Agency, on December 6th, nine vessels totaling 606,540 tonnes of Brazilian corn were set for sail to China this month… Data published on that same day by the U.S. Census Bureau showed U.S. corn exports to China of 505,623 tonnes in October.
China has significantly increased its Brazilian corn imports over the last year, driven by a demand for cheaper and more reliable sources. By the end of year, Brazilian corn shipments to China are expected to exceed 1 million tons. Exporters in the U.S. have experienced rising logistics costs after a record drought saw Mississippi River shipping channels dry up, reducing the number of barges able to access the Gulf of Mexico, and the amount of cargo they could carry. (VV)
In the eleven months of 2022, China imported 52.464 million tons of soybeans from Brazil, according to data from the latest Foreign Trade Secretariat (Secex), a department of the Ministry of Economy.
Volume is 13% lower than the 60.476 million tons in the similar period of 2021, but China remains the largest buyer of Brazilian oilseed. (NRM)
Suriname 🇸🇷
Suriname en China doen eerste landbouw-technisch project | De Ware Tyd | November 22, 2022
~ Article above is paraphrased from Dutch ~
On 21 November, Suriname and China sealed their first agricultural technical cooperation project since entering diplomatic relations in 1976. The "Agricultural Technical Cooperation Centre" includes 200,000 hectares of land suitable for corn, soybean, and livestock. The project will be implemented over 3 years, and is supported by approximately US$10.5 million in Chinese funding. (RP)
Diplomacy 🕊️
Cuba 🇨🇺
China agreed to restructure Cuban debt, estimated to be “billions of dollars” during Cuban President Miguel Díaz-Canel’s visit to China from November 24 - 26. The two countries signed 12 agreements, and China committed US$100 million in emergency donations, food, and supplies to Cuba in response to Hurricane Ian in late September.
China is Cuba's second largest trading partner after Venezuela (see an overview of bilateral relations here.) (RP)
Source: Voice of the People (China-state affiliated media), @VoiceofPD (Twitter)
Guyana 🇬🇾
On Tuesday 29 November, China handed over a cash grant to the tune of US$200,000 to the Guyanese Ministry of Health to procure medical supplies.
…China’s Ambassador to Guyana, Guo Haiyan …also noted that the embassy will donate additional medical supplies worth about US$20,000.
China and Guyana celebrated 50 years of diplomatic relations earlier this June. (RP)
Nicaragua 🇳🇮
~ Article above is paraphrased from Spanish ~
China donated to Nicaragua 10,000 boxes of Lianhua Qingwen capsules, a Traditional Chinese Medicine (TCM) used in the Asian country against Covid-19, informed the Nicaraguan Ministry of Health on Tuesday 22 November.
The donation was delivered in Managua by the president of the Chinese company Skyrizon, Changbao Xu, on behalf of the state-owned Yiling Pharmaceutical.
The Lianhua Qingwen capsules have been approved for treating generic flu symptoms by several countries, including Brazil, Canada, Ecuador, the Philippines, Thailand and Singapore. However, its use as a specific treatment against Covid-19 was notably discouraged in Australia, the US, and Canada and Singapore. (RP)
Trade 📊
Uruguay 🇺🇾
~ Article above is paraphrased from Spanish ~
On December 13 Uruguay’s lead negotiator to the controversial bilateral Uruguay-China free trade agreement resigned his post to become Uruguay’s Ambassador to Germany. This could delay negotiations.
Uruguay’s unilateral pursuit of free trade agreements, against Mercosur rules, continues to irk the group’s other members. Argentina, Brazil and Paraguay rejected Uruguay’s approach this month, reserving their right to adopt measures to defend their interests in the legal and commercial spheres."
Uruguay’s President Lacalle Pou insisted in June that he would negotiate as a bloc, and denied seeking to move unilaterally.
For background on the Uruguay-China FTA, see TCS July 26. (VV)
Ecuador 🇪🇨
On 5 December President of Ecuador Guillermo Lasso said they have negotiated “99%” of a much anticipated Free Trade Agreement with China.
For further background, including Ecuador’s Chinese debt renegotiation, see TCS February 10 and TCS September 9). The deal is projected to increase Ecuadorian exports to China by US$1 billion.
Lasso’s announcement came during the inauguration of the renovated “General Eloy Alfaro” Airport in Manta (Manabí province), whose terminal was rebuilt with a US$ 27.7 million Chinese investment.
Delegations of the two countries met also during the December 14-15 China-LAC 15th edition summit in Guayaquil. (RP)
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