The China Signal - March 27
Zijin Mining breaks ground on Tres Quebradas, ESG impact of Chinese investment
G’day, and welcome to The China Signal. This week, Zijin Mining breaks ground on the Tres Quebradas lithium deposit in Argentina; a report on the negative environmental and human rights impacts that Chinese-funded infrastructure has had in the region; Taiwan bridges Belize’s budget deficit; SOUTHCOM’s annual statement to US Congress, plus more. Read on.
In the Andean province of Catamarca, Chinese mining giant Zijin Mining has broken ground on the Tres Quebradas lithium deposit. With a total investment of $380 million, it is expected to produce 20 thousand tonnes of Lithium on an annual basis, and generate up to one thousand new jobs, according to Zijin’s Vice President. The project’s viability relies heavily on the use of the San Francisco border crossing with Chile, which would connect the mine’s operations with ports in the Pacific, according to the Governor of Catamarca. While the border crossing has been recently reopened by Argentina after remaining shut during the pandemic, Chile has yet to authorise its reopening.
Zijin Mining more than doubled its profits in 2021. Its representatives expect another year of growth, driven by acquisitions and booming demand, which continues to outpace the long development period of lithium ore mining projects. However competition is growing: last week, South Korean steelmaker Posco announced it will invest $4 billion into lithium mining in the Hombre Muerto salt flat shared by the provinces of Salta and Catamarca, seeking to extract 100,000 tonnes of lithium after the project is completed. The price of lithium continues to soar.
The US has taken note. President Biden held a virtual meeting to discuss ways to increase US production of rare earth minerals this week to counter China’s domination of electric vehicle battery production. Biden spoke of how the US has been reliant upon imports from countries such as Australia, China, and Chile, and how recent developments will allow the US to reduce its reliance on foreign imports. (IA)
Broader Latin America 🏝🏔
A report from the Collective on Chinese Financing and Investments, Human Rights and the Environment (CICDHA) lays out the impact that Chinese-funded infrastructure, energy and mining projects have had in Latin America.
The report looked at 26 projects in Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Venezuela.
It found almost all of them contributed to deforestation and water pollution, as well as human rights violations against local and Indigenous communities.
CICDHA’s report lays out numerous recommendations for improving the behavior of companies carrying out projects in Latin America, but expresses doubt about China’s willingness to make a good-faith attempt at improvements.
Read the full report in Spanish here.
Trinidad and Tobago 🇹🇹
On Monday March 21, newly appointed Minister of Planning and Development, Pennelope Beckles, hosted a courtesy meeting with Fang Qiu, Chinese Ambassador to Port of Spain. Partnerships between the two countries already exists in agriculture and agricultural processing, while eight new priority areas of cooperation were outlined:
Poverty alleviation, COVID-19 response and vaccines, climate change and green development, digital economy, food security, development finance, industrialisation and connectivity.
Other meaningful discussions included Chinese interest in supporting Trinidad and Tobago’s transition towards the Blue Economy, notably in the areas of exploration, research and development, seafood processing, and tourism. (RP)
The Ambassador of the People’s Republic of China to Dominica His Excellency XianJiang Lin says the final phase of the Dominica China Friendship Hospital comes to an end for a handing over during the first half of this year.
His Excellency made the announcement in his address during the commissioning of HIFU services at the Dominica-China friendship hospital on Wednesday March sixteen 2022.
Taiwan Diplomacy 💱
On Tuesday March 17, Prime Minister John Briceno outlined specific aspects of 2022-23 the General Revenue Appropriation Bill before the House of Representatives. Following the outcome of Belizean March 8-March 12 delegation to Taipei, he stated:
The new Budget, proposed at $1.361 billion, will be the largest spending and investment in the history of our country.
Overall deficit of $97.6 million will be bridged through grant funding from Taiwan and the issuing of treasury bills.
Notably, Belize and Taiwan had already agreed to a five-year program of grant and concessionary loans totaling US$105 million in 2021. The program has now been converted to a two-year length. Briceño detailed:
These additional funds will be in education, expanding the Healthy Start Feeding Program and eventually, the Digital Devices Program; in housing, expanding our current target for distributing quality, low-cost housing units countrywide; and in financing SME (small medium enterprises) credit, especially low interest loans in the agro-productive sector.
[Moreover], a US$16.8 million grant will be used for the design and construction of a new hospital for Ambergris Caye. (RP)
Broader Latin America 🏝🏔
This week saw the US Southern Command’s (SOUTHCOM) new commander General Laura Richardson present its yearly posture statement before the House Armed Services Committee. General Richardson spoke of China’s “ambition to fundamentally revise the world order to serve its authoritarian goals and expand its global influence.” China’s “investments in strategic infrastructure, systematic technology and intellectual property theft, disinformation and propaganda campaigns, and malicious cyber activity” were all cited as strategies being used by China to expand its “long-term access and influence” in the Western Hemisphere. Moves in the realm of 5G technology, the curtailing of Taiwan's diplomatic recognition, vaccine diplomacy, loans, and even investments in the Panama Canal and the port of Ushuaia in Argentina’s Tierra del Fuego were cited with concern. (IA)
Argentina 🇦🇷 + Brazil 🇧🇷 + China 🇨🇳 + Russia 🇷🇺
The war in Ukraine continues to rattle global commodity markets, raising concerns that food shortages could soon be felt around the world. Brazilian farmers are anxious at the impact of halted fertiliser supplies from Russia - the world’s leading exporter, and Belarus is having on its crop yields. Iran is now being mooted as a possible fertiliser supplier, which could be bartered for Brazilian corn.
Argentina has reopened its exports of soy oil and meal after freezing exports and raising export taxes from 31% to 33% earlier this month, while Brazil has cut import tariffs for ethanol and other food products to zero.
President Xi Jinping and Premier Li Keqiang both mentioned food security repeatedly in their speeches before the meeting of the Two Sessions held earlier in March. However, reducing China’s food import dependency is fraught with political risks for Beijing, by potentially inflating food prices for Chinese consumers. (IA)