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Electric cars: How nations sitting on lithium reserves are handling the new ‘white gold’ rush | Economy and Business

The economic outlook for Latin America is not great. Before the Covid-19 pandemic hit, the region was already losing momentum and multilateral organizations and analysts were warning that governments would have to change their policies if they were to boost development.

Lithium represents an opportunity to turn the region’s prospects around. A mineral with high electrical conductivity, it is essential for producing the batteries that will enable the world to cut its dependence on fossil fuels and migrate to cleaner renewable energies. Bolivia has the largest reserves in the world. The Bolivia-Argentina-Chile ” lithium triangle” accounts for 63% of the planet’s reserves. Peru and Mexico are in possession of a further three million tons or thereabouts. Lithium is, for big investors, the brightest star on the Latin American map.

The energy transition has come at a time when nationalism is on the rise in these countries. In recent months, efforts have been made to bring production under state control, a move that many citizens favor. Many others oppose it because of environmental concerns. Lithium is called “white gold” because of its market value and its silver hue. In English it is known as “white oil,” a subtle but telling difference. For Latin Americans, lithium is a precious mineral like gold and silver, both of which have been exploited in their region since colonial times. But in Anglo culture the mineral is viewed as an enhancer, a natural resource that will be transformed into something else, a step in the value chain.

The price of lithium on the international market rose approximately 80% in 2021, according to a Bloomberg index. Just four years ago, another analysis by Bloomberg predicted that by 2040 more than half of all car sales in developed countries would be electric vehicles. However, a more recent study by the consulting firm KPMG, published in November last year, cut this forecast by 10 years. According to KPMG, 52% of car sales will be electric by 2030. More than 1,100 auto industry executives in 31 countries estimated that the sector will undergo a “radical transformation” in the next five to 10 years.

Workers load salt onto trucks inside a state-owned lithium production facility at the Salar de Uyuni in Potosí, Bolivia.
Workers load salt onto trucks inside a state-owned lithium production facility at the Salar de Uyuni in Potosí, Bolivia.Carlos Becerra (Bloomberg)

The world is moving rapidly in this direction and the need for lithium feels urgent, as if the window of opportunity could close at any moment. For years, Chile has depended on private investment to extract and process the mineral. Chile’s president, Sebastián Piñera, who leaves office on March 11, announced the award of two production quotas of 80,000 tons of lithium each to two companies last month, one funded by Chinese capital and the other by Chilean capital. The announcement was controversial as the leftist president-elect Gabriel Boric won the election with a plan to create a national lithium company and implement a “new governance” of the salt flats containing the mineral’s reserves. Boric also promised that all communities in Chile, regardless of their location, would have access to water, a necessary resource for mining. Piñera’s contracts are now in legal limbo after being suspended by an appeals court.

The days of the current model might be numbered in any case. On February 1, Chile took an initial step toward nationalizing some of the world’s largest copper and lithium mines as Congress approved a proposal to give control to the state. The vote was part of the process of drafting a new Constitution. Currently, the Constitution prohibits the nationalization of these resources.

In Mexico, where reserves have the potential to exceed the US Geological Survey’s estimates of 1.7 million tons, President Andrés Manuel López Obrador has proposed something similar. As part of a bill to reform the energy sector, López Obrador is planning to nationalize lithium and create a state institution to control its processing. Unlike Chile, lithium production in Mexico has been limited to a single contract with a Chinese company, which to date, has not extracted a single gram of lithium carbonate. Experts point out that the government does not have the resources to create a state-owned company. Mexico is, therefore, idling in another kind of limbo.

In Peru, Pedro Castillo’s government is seeking to modify an existing contract with the Canadian company American Lithium Corp so that the mineral is exported with added value, according to a pro-Castillo lawmaker’s statements to local media. In other words, the state wants companies operating in Peru to do more than just extract and refine the lithium for export, but to also invest in factories to transform the lithium into a product with a higher market value, generating more and better-paid jobs.

Argentina is, to some extent, the exception. There, exploration rights are in the hands of the provinces and President Alberto Fernández’s government has sought to promote the country’s reserves worldwide. In 2020, Fernández set out to increase annual lithium carbonate production by 700% to 230,000 tons by the end of this year. This will require an investment of more than $1 billion by the private sector. During Fernández’s visit to China at the beginning of February, government officials revealed that Argentina is negotiating with the Chinese to establish new investments, including plans to set up a battery factory.

A brine pool at a lithium mine in the Atacama Desert, Chile on May 29, 2019.
A brine pool at a lithium mine in the Atacama Desert, Chile on May 29, 2019. Bloomberg Creative Photos (Bloomberg)

While Argentina is moving up a gear, Bolivia appears to be taking its time. Because of the unparalleled size of its reserves, this is the country that investors have the keenest eye on, but the mineral has already generated conflicts. In 2019, President Evo Morales announced that the German company ACI Systems would invest nearly $1.3 billion to exploit a large slice of its lithium reserves. Just weeks later, a major political crisis paralyzed the negotiations and Morales was forced to flee the country.

In July 2020, a Twitter user confronted Elon Musk, head of leading electric vehicles manufacturer Tesla, claiming that the “US organized a coup in Bolivia” just so that Musk could have access to the country’s lithium. “We will coup whoever we want! Deal with it!” replied the entrepreneur in a tweet that soon disappeared; the only remaining record of it are screenshots in newspaper reports. The quip gave Morales the perfect hook to link the control of lithium to his administration’s demise. Last year, during a visit to Mexico, the former president argued that the mineral should be in the hands of individual countries rather than the private sector. “We decided, as a country, to industrialize lithium,” he said in statements in which he also criticized Tesla. “We hired experts… and we started the great industry and then came the coup. American congressmembers have recognized that the coup was over lithium.”

In November 2020, Luis Arce, an ally of Morales, became president of Bolivia and embarked on a different approach. First, he organized a public event, a kind of fair, to attract domestic and foreign enterprises interested in investing. Subsequently, eight companies from the US, China, Russia and Argentina were selected and allowed to pilot test the extraction technology. In April, a technical group from the state-owned Yacimientos de Litio Bolivianos is expected to decide which companies should receive contracts. Among the factors to be considered are mineral recovery percentage, environmental impact and community protection, explains Diego von Vacano, a professor at the Texas A&M University in the US and an informal advisor to Luis Arce’s government.

According to Von Vacano, the technical group is independent and made up of professionals in the field, two indigenous women and two men. Lithium mined from brine, as is the case in Bolivia, has a lower impact on the environment than lithium mined from solid sediment, as is the case in Mexico. However, it is still mining, which affects the ecosystem. “Bolivia does not want to repeat the mistakes that have been made; for example, the damage to the environment seen in Chile,” says Von Vacano.

While Argentina is moving up a gear, Bolivia appears to be taking its time

“Throughout the history of colonialism, specifically with regard to mining, literature often describes mines as dead or uninhabited landscapes, devoid of life – a concept that in Latin is called terra nullius, or, no man’s land,” says Thea Riofrancos, an associate professor of political science at Providence College, Rhode Island, in the US. “In fact, that’s not the case.” Riofrancos recalls the first time she visited Chile’s reserves in 2019. “I was amazed by the desert in many ways,” she says. “The salar [a salt-encrusted depression] is like a grayish-white expanse that stretches as far as the horizon and seems endless. There are flamingos, and, if you’re lucky, you can see beautiful birds of prey.”

The Atacama Desert in Chile is incredibly arid and has high levels of ultraviolet radiation. According to a group of academics, it is “one of the harshest environments on Earth” and could hold the key to surviving global warming. In a paper published in the journal Proceedings of the National Academy of Sciences of the United States of America in November, a group of 27 scientists advocated preserving the desert to conduct scientific research, pointing out that “as a natural laboratory, Atacama is unparalleled for studying plant adaptation to extreme environmental conditions.”

Historically, the southern hemisphere has provided the global economy with its raw materials, though its people have not benefited, says Riofrancos. “The case of Bolivia is extremely dramatic because the origins of Spanish imperialism lie in the Potosí mines,” she explains. “The country has provided the world with minerals from silver to tin, as well as natural gas and agro-exports and now the prospect of lithium.”

Perhaps that is why the Arce administration is handling the progress of the pilot program with discretion. Bolivia’s Ministry of Hydrocarbons and Energy did not respond to questions from EL PAÍS about the estimated potential of this industry in terms of gross domestic product. Revenues will be subject to price fluctuations on the international markets, which is why there is already talk in Argentina and Bolivia of creating a lithium cartel similar to the Organization of Petroleum Exporting Countries (OPEC), which imposes production quotas to prevent oil prices from plummeting.

“We are working against the clock,” says Von Vacano, who adds that “it is urgent to push lithium faster” because, otherwise, investors will look to sink their money into other countries. The revenue gained from lithium can be plowed back into local communities as is done in Norway and Qatar, Von Vacano points out. “This can be very positive. It can be a royalty model that benefits not only the regions of Potosí and Uyuni but also the rest of the country. This is money that can be used for education and health. It could transform the country completely.”

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The US, Japan and the Philippines close ranks against Beijing’s pressure in the South China Sea | U.S.

China was not present, but it was the main protagonist. The first trilateral meeting between the leaders of the United States, Japan and the Philippines on Thursday at the White House sought to provide a show of unity in the face of China’s increasingly intense pressure on Manila in the South China Sea, where the Asian giant claims sovereignty over almost all of the area and maintains a bitter territorial dispute with the archipelago. Washington has described Beijing’s tactics as “intimidation.”

The Philippine and Chinese vessels have engaged in increasingly frequent and hostile skirmishes in an area of the South China Sea that the United States calls the Second Thomas Atoll, and which the Philippines know as the Ayungin Shoal. There, Manila maintains a military garrison in an old, rusty warship — which it intentionally ran aground in the reef — to reinforce its territorial claims in the reef. Chinese ships patrol the area and try to stop the vessels that come to supply it with water cannons and lasers.

The most serious incident in recent weeks took place at the end of March, when Chinese ships fired a water cannon at a Philippine logistics ship that was trying to bring supplies to the military personnel stationed in the shoal, which is located within 200 miles of the Philippines exclusive economic zone. That episode sparked loud protests in Manila, which were backed by Washington. For the United States, Beijing’s tactics amount to coercion and violate international law in waters that are considered one of the most volatile areas on the planet. U.S. President Joe Biden addressed the issue during his telephone conversation with Chinese President Xi Jinping on April 2.

At the start of the trilateral meeting on Thursday, Biden warned that any attack against Philippine forces in the South China Sea would be grounds to apply the mutual defense treaty between Washington and Manila, which was signed in 1951. He said that U.S. forces would come to support its ally.

“I want to be clear, the United States’ defense commitments to Japan and to the Philippines are ironclad. They’re ironclad. Any attack on Philippine aircraft, vessels or armed forces in the South China Sea would invoke our mutual defense treaty,” said Biden.

The president met separately with Philippine President Ferdinand Marcos Jr. shortly before the trilateral meeting. The previous day, he received Japanese Prime Minister Fumio Kishida, who was on a semi-official visit to the White House. The three countries share deep distrust over China’s growing assertiveness in the Asia Pacific and the Asian giant’s territorial claims, which an international court deemed baseless in 2016.

The Philippines and China are in dispute over the South China Sea, while Japan and China have conflicting claims in the East China Sea over islands Japan knows as Senkaku and China identifies as Diaoyu. Manila — which during Rodrigo Duterte’s mandate tried to get closer to Beijing — has resolutely aligned itself with Washington since Marcos’ election. The Philippine president is completing his second official visit to Washington in just over a year.

Tokyo, meanwhile, is investing rapidly in building up its defense in a bid to transform its army into the third most powerful in the world. In their bilateral meeting on Wednesday, Kishida and Biden announced the biggest upgrade to the Japan-U.S. security alliance in more than 60 years. The plan includes greater coordination between their commands and the joint development of cutting-edge military technologies.

“The United States, Japan, and the Philippines are three closely-aligned maritime democracies with increasingly convergent strategic objectives and interests,” White House National Security Advisor Jake Sullivan said on Tuesday.

At the end of the meeting, the leaders said they will announce a Coast Guard patrol in the Indo-Pacific region. The U.S. Coast Guard will also admit members of the Philippine and Japanese corps on these patrols for training, according to senior U.S. officials who spoke on condition of anonymity. Biden also announced the establishment of a new economic corridor in the Philippines for infrastructure development and agricultural projects, among other investments.

This week’s bilateral and trilateral meetings are part of the Biden administration’s efforts to develop a network of economic and security alliances in the Indo-Pacific to respond to China.

“Today’s summit is an opportunity to define the future that we want, and how we intend to achieve it together,” Marcos told the press on Thursday. “This meeting can be just a beginning. Facing the complex challenges of our time requires concerted efforts on everyone’s part, a dedication to a common purpose and an unwavering commitment to the rules-based international order.”

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The worst version of Nicaragua against the best version of Germany | International

It may be a noble cause, but its champion couldn’t be worse. The Nicaraguan dictatorship, recently censured by the United Nations for severe human rights abuses akin to crimes against humanity, has criticized Germany for arming Israel, and especially for elevating Israel’s security and right to exist to a “matter of state,” as defined by former German Chancellor Angela Merkel in her historic 2008 address to the Knesset (Israeli Parliament).

Nicaragua and Germany signed the 1948 Genocide Convention, which commits both nations to preventing and punishing genocide, as well as arbitration by the United Nations International Court of Justice (ICJ). Much like an earlier ICJ case brought by South Africa against Israel, Nicaragua is accusing Germany of facilitating breaches of the Genocide Convention by providing arms and other support to Israel. Nicaragua wants Berlin to stop weapon supplies and prevent weapons already given from being used in Gaza, and resume financing UNRWA, the U.N. relief agency in Gaza that has been accused of infiltration by Hamas.

Nicaragua filed the case against Germany because it was unable to do so against the United States, a long-time adversary of the Sandinista regime. Forty years ago, Nicaragua filed an ICJ case against the U.S. over its support of guerrillas fighting the Sandinista regime. Washington is a key weapons supplier to Israel and a signatory of the Convention. However, the U.S. took 40 years to ratify it, and only after significant amendments that gave the U.S. power of approval over any charges against the nation. Samantha Power, the current chief of the U.S. Agency for International Development (USAID) and former ambassador to the U.N., once likened this scenario to granting an accused murderer the authority to approve any charges brought against him.

This is the third case brought to the ICJ during the Gaza war. The first one, initiated by South Africa, resulted in two warnings for Israel to ensure humanitarian aid and civilian security. The second case, focusing on the consequences of the occupation, highlighted international support for the Palestinian State. The ICJ is not expected to quickly rule on the genocide case, but it adds to increasing U.N. and global pressure on Netanyahu for a lasting ceasefire.

Germany today is at its finest, driven by its sense of responsibility stemming from a tragic history. It stands as a staunch advocate for multilateralism and the international rule of law. Germany’s defense against Nicaragua’s charges is solid and its legitimacy as a democratic state is unassailable. Unlike the United States, it fully acknowledges the ICJ’s jurisdiction and the binding nature of its rulings. And all it needs to reverse the increasing polarization between the global south and the liberal West is full recognition of the Palestinian State’s right to exist.

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How Entrepreneurial Mindset Is Necessary For Startup Triumph

Entrepreneurial Mindset & Startup Triumph

The Voice Of EU | In today’s dynamic world of startups, achieving exceptional growth isn’t a one-shot endeavor. It demands more than a stroke of luck or a hidden formula; it requires an unwavering entrepreneurial mindset, a steadfast commitment, and consistent, sustained effort.

How Entrepreneurial Mindset Is Necessary For Startup Triumph

Picture Credits: PS Vault

In the subsequent sections, I’ll dissect five crucial factors to high-performance growth psychology that can steer your startup towards unprecedented success.

1. The Primacy of Communication

In the quest for growth, it’s commonplace for companies to prioritize feature development over precise language. Yet, this approach is fundamentally misguided. Language should precede all else.

The words you choose to articulate your product and company not only define your identity but also establish user expectations. Your choice of language wields significant influence, shaping how users perceive and engage with your offering. For example, a ridesharing service becomes exponentially more appealing when it promises a ride in four minutes or less.

User-Centric Empathy

Successful Founders distinguish themselves by their ability to think beyond their product and focus on the users. It’s imperative to understand how users think and feel, considering the intricate web of their lives.

To truly stand out, you must ask, “What does my product mean to them, and how does it fit into their world?” Behind every thriving tech company lies a profound insight into human psychology, a key that resonates with users’ needs and desires.

Perpetual Motion

In a landscape dominated by industry giants, speed emerges as your greatest ally. Much like the ancient shrew that thrived through ceaseless motion, startups must embrace a similar philosophy, “be creative, be dynamic.”.

To navigate the whirlwind of rapid changes and outmaneuver larger competitors, you must be in perpetual motion. Swift experimentation, rapid iteration, and an unwavering forward momentum are the cornerstones of sustained growth.

The Embrace of Data

Commitment to measurement is the engine driving growth. Being truly data-driven is not merely a buzzword, but a fundamental philosophy. Devoting substantial engineering resources to measurement, up to half of your total, demonstrates a genuine love for data. It should be an integral part of your company culture, displayed prominently for all to see. Your daily stats should be a source of pride and a testament to your dedication to growth.

Resilience in the Face of Setbacks

Failure is a constant companion on the path to growth. Embracing a mindset that can endure these setbacks is crucial. Most initiatives will yield negative outcomes, and being able to move forward despite this is paramount.

It’s a psychology of resilience, encapsulated in the saying, ‘Success is going from failure to failure with no loss of enthusiasm‘. This grit and determination are the keys to achieving substantial growth.

Implementing Growth Psychology

To instill these growth-oriented mindsets in your team, consider the following steps:

1. Teach the mentality, particularly the willingness to endure repeated small failures.

2. Clarify that every member is directly responsible for growth, regardless of their official role.

3. Provide your team with the authority to drive product changes and allocate resources for growth.

4. Encourage your team to be more aggressive in pushing growth boundaries.

5. Keep taking big swings and be open to creative, high-risk strategies.

Ultimately, growth is a collective effort, but it hinges on the psychology of the CEO. Founders shape their startups through consistent actions and decisions.

Cultivating the right growth psychology can be the difference between sluggish progress and exponential success. It empowers your company with data-driven visibility, constant momentum, and the audacity to aim for 1000% growth.

If you’re in the latter camp, reach out to us to explore further opportunities for growth.

We Can’t Thank You Enough For Your Support!

— By Raza Qadri | Business, Science & Technology Contributor “The Voice Of EU

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