2023-07-18 09:45:05
Africa, and more specifically its subsoil, is once once more coveted by the North. The industrialized countries facing the energy transition all need the metals found on this continent. A unique opportunity for Africa to restore more justice and equality in international trade. To talk regarding it, Ali Laïdi receives Ousseini Hadizatou Yacouba, Minister of Mines of Niger.
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#Mining #Niger #strategic #sector
Tag:
lithium
Chilean President Gabriel Boric’s New Lithium Policy Threatens Soquimich’s Monopoly: Corruption, Controversy, and the Battle for Control
written by Alexandra Hartman Editor-in-Chief
2023-07-06 21:16:58
The new lithium policy of Chilean President Gabriel Boric threatens the monopoly of the main mineral exploiter in Chile, the controversial Chemical and Mining Society (Soquimich or SQM), one of the most lucrative companies in the country, best known for its corruption and links with the dictatorship of Augusto Pinochet (1973-1990) than for its millionaire businesses and operations.
Soquimich, controlled for 40 years by Julio Ponce Lerou –former son-in-law of the dictator– and today also by China’s Tianqi, is one of the world’s leading producers of iodine, potassium and fertilizers, but in recent years its main business has focused on lithium that it extracts from the Salar de Atacama, the largest in Chile and the third largest in the world.
Generous contracts signed between 1993 and 1995 with the Production Development Corporation (Corfo), state administrator of the deposit, gave the mining company strategic control of the salt flat in a concession until 2030 (and renewable) with privileged conditions.
ALSO READ: ECLAC: Latin America is below its potential in the lithium industry
“SQM was and continues to be the regalona [mimada] of the Santiago Stock Exchange, which reports great benefits and profits,” journalist Carlos Tromben, an expert on Chile’s economic powers, told EFE.
“people’s capitalism”
The Soquimich privatization process began in the midst of the dictatorship, in the early 1980s. Ponce, who at the time chaired the SQM board of directors as well as the general manager of Corfo, incorporated up to 30% of private capital into the company, indebted and turned into a burden for the State.
“The workers themselves became, in part, owners of the company through the policy of the so-called “popular capitalism”, promoted by the regime under the motto ‘stop being a proletarian and become an owner,'” explained to EFE the journalist Sergio Jara, investigator of the great Chilean corruption plots.
In a disputed operation, Julio Ponce -together with other executives- bought some time later and at a low price the shares acquired by the workers and grouped in the company Pampa Calichera, from which the businessman created a complex structure of cascading companies to control SQM with little capital.
“The waterfalls are paper companies, with a pyramidal structure that have their chain of control in the Cayman Islands,” Jara explained. According to him, they allowed Ponce to go into debt to buy more shares, improve his position in the company and “place” his friends and associates on the board, such as former Pinochet minister Hernán Büchi, now in office.
Under the command of Julio Ponce
The journalist Víctor Cofré, author of an exhaustive profile on Ponce, describes him as “a controversial and enigmatic character who held public office for almost a decade; he took control of a company, Soquimich, which belonged to the State; He publicly confronted businessmen and major authorities and financed, through the company that he has governed since 1987, politicians of all colors ”.
He also talks regarding an unusual corporate president, “with almost exclusive dedication and permanent presence” in his office and obsessed with lithium.
For some, he was a talented visionary, who lifted Soquimich off the ground and detected a unique opportunity by opening SQM’s doors to lithium. For others, a simple extractivist.
“It is necessary to demystify these big businessmen who present themselves as if they were the only ones capable of exploiting a task with that level of natural resources. You don’t have to be a genius to do it,” said Jara.
With a personal fortune that Forbes magazine estimates today at 3.5 billion dollars, Ponce even maintains power within Soquimich even though he is no longer part of the board of directors, journalists and former workers assured EFE.
According to a former high-ranking official of the company consulted by EFE, “it indirectly controls some companies and can designate three of the eight directors of the company.”
corruption breaks out
In 2015, with almost three uninterrupted decades as chairman of the board, Julio Ponce was forced to resign from his position due to one of the biggest political corruption scandals in Chile, which discovered that the mining company had distributed money irregularly to political sectors of all the colors between 2009 and 2014.
The case coincided with the disclosure of other precedents regarding bad stock market and financial practices of the cascading companies once morest the interests of minority shareholders, including the then former president Sebastián Piñera (2010-2014).
SQM’s prestige ended up sinking following several court sentences for anti-union practices once morest its workers: “The company bought the leaders with perks” and “divided them,” Tranquilino Alucena, a union leader at the time, told EFE.
In the midst of negotiations to extend its lithium concession, Soquimich recently launched a media campaign to renew its image, modernize it and, above all, definitively bury its two great ballasts: links with the dictatorship and corruption.
Source: EFE
ALSO READ: China BYD joins Latin America’s lithium rush in switch to electric cars
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#SQM #powerful #lithium #controller #Chile #marked #dictatorship #corruption #Companies #Economy #Chile #Lithium #Gabriel #Boric #SQM #ECONOMY
China’s Growing Influence in Latin America and Argentina: Trade, Loans, and Investments
written by Alexandra Hartman Editor-in-Chief
2023-05-02 01:05:29
The activation of a swap tranche to pay imports from China in yuan and the announcement of a new disbursement of 500 million dollars from the Asian country to finance the construction of hydroelectric dams in Santa Cruz is verified in a context of greater rapprochement of Beijing to Latin America. This also explains the renewed concern on the part of the United States so that China does not continue to increase its power of influence in the region and in Argentina itself.
According to the last publication of the Boston University Global Development Policy Center, In 2023, economic relations between Latin America and the Caribbean and China began to recover from the pandemic, with three new loans to the region for the first time since 2019, along with growth in foreign direct investment from China and significant moves towards new agreements. of free trade. As a result of lithium, Argentina, which joined the Belt and Road Initiative last year, occupies a privileged place in the purchase of companies and direct investments.
Trade
In 2022, trade between Latin America and China once once more reached record levels, with exports to the Asian country estimated at 184 billion dollars and imports at 265 billion dollars. However, the resulting trade deficit of $80 billion is not distributed evenly.
While Mexico, Argentina and Colombia show a persistent deficit in their trade balance with respect to ChinaThe opposite is the case of Chile, Peru and Brazil. In Chile and Peru, the trade surplus is explained in the first place by the role of copper exports, a key mineral to expand the electrification that China requires to expand its urbanizations and serve its industry.
Chile also supplies China with most of the lithium, followed by Argentina, although the values are not yet high enough to have a decisive impact on the trade balance. While, Argentina has a strong role in frozen meat sales, along with Brazil, and in soy derivatives.
One of the points that explains the position of the report regarding underlining the “greater rapprochement” of the region with China is the table of progress in the signing of free trade agreements, following the batch of Chile, Costa Rica and Peru, agreed in 2006, 2010 and 2011respectively.
Last year, Ecuador negotiated a free trade agreement with the Asian country and announced at the beginning of this year the technical closure of the negotiation. Furthermore, the government of Uruguay wants to move forward with its agreement, which would imply a lethal blow for Mercosur. For now, China prefers that the unity of the bloc be maintained.
credits and investments
While in 2020 there were no new country-country credits from China to Latin American countries and in 2021 there was only one, last year the number rose to three loans financed by the China Development Bank and the Export-Import Bank of China. These operations were as follows: 500 million dollars to Brazil to support social projects, 121 million to Barbados for a road infrastructure project to boost tourism and a 192 million loan to Guyana, also for a road project.
In addition, Ecuador agreed to a restructuring of its debt with China, with a reduction in its payments of the order of 1.4 billion dollars until 2025. In the case of Argentina, which formalized its entry into the Belt and Road, an initiative of China to expand its commercial and financial influence throughout the world, also extended by 5 billion dollars his currency swap.
In the field of investments, Argentina had a salient note regarding China’s relationship with the region. Within the three purchase operations of local companies, two occurred in the country, both in the lithium sector. It is regarding the decision of Ganfeng Lithium for 962 million dollars to buy Lithea, which owned the Pozuelos-Pastos Grandes salt flat. Second, there is the $767 million purchase made by Zijin Mining Group of Neo Lithium Corp. to keep the Salar de Tres Quebradas, in Catamarca.
As regards direct foreign investment, Argentina also occupies a preferential place. Last year, The Chinese company Chery Automobile announced the investment of 225 million dollars to develop an electric car factory. Meanwhile, Liex, a subsidiary of the litiferous company Zijin Mining, announced its intention to build a new lithium carbonate factory in the country with an investment of 380 million dollars.
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#role #China #midst #Argentine #crisis #tranche #swap #activated #disbursement #dams #arrives
“National Lithium Strategy: Impact on Mining Sector and Market”
written by Alexandra Hartman Editor-in-Chief
2023-04-21 20:58:11
The national market, especially the companies linked to the mining sector, experienced a convulsive day marked by the President’s announcement of the new “National Lithium Strategy”. While from the Chemical and Mining Society they look at the process with caution, from the CPC they affirm that they feel “displaced” by the announcement.
After the announcement of President Gabriel Boric regarding the new “National Lithium Strategy”, the S&P Ipsa suffered its biggest daily decline since September 2022falling a 3.16% to 5,226.93 pointsas reported Financial Diary.
With clear all indicator gains following March 20the 2nd action what suffered more during trading hours was SQM-B, with a loss of 14.69%, remaining at $52,979 per share (its lowest level since March 2, 2022). The first was SQM-Awho lost a 16,09%positioning its price at $43,400 per sharen.
Besides, nitrates (-11,91%), White gold (-11,02%) y North Great (-6,91)>%, companies linked to the Pampa Group (main shareholder of SQM together with Tianqui), also presented big losses throughout the day.
Al closingthe miner scored his worst day since March 16, 2020deleting more than US$3.3 billion capitalizationprocessing $121,510 million of transactions between both series, DF ideals.
National Lithium Strategy alerts the market
“Our challenge is for our country to become the world’s leading lithium producer, thus increasing its wealth and development, distributing it fairly while protecting the biodiversity of the salt flats.”
With this sentence the president began to enumerate the fundamental aspects of the “National Lithium Strategy”: state participation through the “National Lithium Company”, public-private collaboration, protection of ecosystems, involvement of communities and generation of added value.
These ads were the ones shook the stage for investors and the marketas commented by Vector Capital Equity Trader Jorge Tolosato Diario Financiero.
“Today there are more questions than answers and the market is considering an absolutely negative scenario. There are investors who do not agree with what is happening and prefer to get out of paper”.
During the national chain, the The president also highlighted the dynamics that are expected to be applied to the Salar de Atacamawhere it ensures that contracts with private companies in force until 2030 will be respectedbut which will correspond to Codelco seek state participation in the aforementioned salt flat before that date.
SQM hopes to be part of the new process
Al margin of panic in the markets, from Chemical and Mining Society of Chile (SQM)they hope that the strategy “will be a boost to the productive expansion in Chile, so that the country can take advantage of the favorable conditions of world demand for this element.”
Besides, hope to be part of the dialogue to start in this regard, highlighting in turn that the company “participates in the global lithium industry successfully since 1997, maintaining leadership and developing high-standard lithium chemicals, which have positioned Chile in the most demanding of the world”.
CPC accuses few incentives for private sector investment
From the Confederation of Production and Commerce (CPC),
Besides, from the union they accuse that there would be no incentives for private investment in lithium.
“One says ‘if only the State requires the capital of the private and the private are not going to have access to control’, then how is it invested?, how is that capital spent?, because it will not have a majority on the boards , having less than 50% of the participation. It is a contradiction, ”he pointed out, adding that“ the train is going to pass us by in the exploitation of the mineral ”.
Government calls for unity and summons citizen participation
He President Boricin middle of reviews received from some sectors of the business communityreported that carry out a participatory process in between workers, employers, unions, unions, communities, indigenous peoples and the scientific world.
In addition, he recalled his participation in Enade, “where the companies, through the speeches of the president of ICARE and the president of the CPC, asked the political world for unity to make Chile move forward.”
The head of state assured that pick up the callat the same time that They ask for unity to carry out these relevant projectsappealing at the same time that the country needs a “fairer distribution of wealth to have better social cohesion (…) I have no doubt that the great tasks of the country, in particular a new development model, require that we work together ”.
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#SQM #shares #plummet #lithium #announcement #IPSA #suffers #biggest #drop #months #Economy