🌍 Chile to take control of its lithium

🗺️ AROUND THE WORLD

1. 🇹🇯 Tajikistan: Mexico sold its presidential jet to Tajikistan for $92M last week, after Mexico’s president (‘AMLO’) said it was too lavish. AMLO has never used the plane, which a predecessor bought for $200M.

2. 🇪🇸 Spain: Prime minister Pedro Sanchez told parliament last week that drought is now a “central political and territorial” challenge for Spain. Reservoirs throughout the country are only around 25% full.

3. 🇻🇳 Vietnam: Observers have accused Vietnam of abducting a dissident who had been living in Thailand. Vietnam’s government says the man was detained while trying to re-enter the country illegally.

4. 🇨🇦 Canada: Prime minister Justin Trudeau reportedly told NATO that Canada will never meet its 2% GDP defence spending target, according to leaked Pentagon materials. The leak also alleges the state of Canada's underfunded military is a source of tension among Western allies.

5. 🇸🇩 Sudan: Several countries evacuated their diplomats from Sudan over the weekend. Sudan’s two warring factions continue to ignore ceasefires, including one to mark the Muslim holiday of Eid al-Fitr on Friday.

🇨🇱 CHILE | LITHIUM

Chile to bring lithium under state control

Briefly: Chile's president Gabriel Boric has announced plans to place the country's lithium sector under state control. Its Atacama region supplies nearly a quarter of the globe’s lithium, second only to Australia.

Lithium is a white metal that's critical for batteries used in the energy transition. And under Chile’s new rules, any company seeking to mine Chile's lithium will have to partner with a new state-owned firm that’ll have a controlling share.

Boric says he’ll honour existing contracts with the two lithium miners already in Chile, but hopes they’ll “negotiate” a role for the state before their contracts expire. And that does feel a little like the iceberg offering to “negotiate” with the Titanic before impact (shares in both miners sank accordingly).

The plan still requires approval from Congress, which Boric doesn’t control.

Intrigue’s take: It’s easy to see this as yet another leftist leader nationalising an industry. But the trend is bigger (and more important) than that:

• Multiple emerging markets are now using export bans or nationalisation to assert state control over key resources

• And advanced economies are using critical minerals strategies to assert control over key resources and dilute China’s presence

This is all partly about countries scrambling to secure resources for the energy transition. But again, it's also bigger than that: it’s about our world getting more volatile, and countries holding tighter to anything that gives them leverage.

So something tells us this trend won't stop with Chile, nor with lithium.

Also worth noting:

• Argentina, Bolivia, Chile and Mexico have variously floated the idea of an Opec-style lithium cartel to co-ordinate on production and pricing.

• Chile’s track record with state-owned resource companies is better than the regional average: its Codelco is the world’s largest copper miner and has a relatively strong reputation.

Today’s briefing is sponsored by Roca News

🇧🇩 BANGLADESH | TRADE

The benefits of being a ‘least developed country’

Briefly: In three years, Bangladesh will lose the preferential trade treatment that comes with being a ‘least developed country’. So the South Asian country is now trying to sign 11 free trade agreements (FTAs) as quickly as possible.

Bangladesh needs the FTAs to maintain market access for its garments sector, the world’s second largest garments exporter after China. But Bangladesh is also proving an attractive trade and investment partner in its own right:

• It’s a steadily-growing market that’s home to 170 million people, and

• Its instinct to hedge on China has opened new infrastructure investment opportunities for other partners like India and Japan

Intrigue’s take: Bangladesh isn’t the only one preparing to lose its tariff-free perks; six other countries will graduate from the ‘least developed’ group by 2026.

But negotiating FTAs is neither easy nor fast, particularly if you’re a first-timer (just ask the UK). And global trade is slowing. So Bangladeshi PM Sheikh Hasina has quite the climb ahead.

Also worth noting:

• Bangladesh currently has no FTAs, but PM Sheikh Hasina was in Japan last week following reports the two countries are in negotiations.

• Eight ‘least developed’ countries are now in negotiations to join the WTO, including Bhutan, Ethiopia, and São Tomé and Príncipe.

👀 EXTRA INTRIGUE

Our roundup of quirky global news to get you moon-walking into your Monday:

• The Macquarie Dictionary of Australian English has included ‘murder noodle’ (for a venomous snake) in its words of the month list.

• Rapper “Pras” of the Fugees claims a Malaysian financier paid him $20M to help get a photo with Barack Obama.

• Again in Malaysia, some cat owners are dressing up their pets in traditional Malay clothing for the festive season.

• And in Missouri, a bald eagle finally became an adoptive dad after weeks of meticulous practice incubating a rock.

🐦 TWEET OF THE DAY

Spot the difference?

Xinhua News (China’s state news agency) has lost its “China state-affiliated media” tag after Twitter removed all such labels from its platform. Various publicly funded (but editorially independent) Western outlets had objected to being labelled “government-funded” on Twitter.

🗳️ POLL TIME!

Thursday’s poll: Do you think the European Chips Act will be enough?

🟨⬜️⬜️⬜️⬜️⬜️ 👍 Yes, Europe's manufacturing sector just needs some help (22%)

🟩🟩🟩🟩🟩🟩 🤔 No, it doesn't go far enough to make a difference (75%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🖋️ Other (write in!) (3%)

Your two cents:

• 🖋️ M: “Enough for what? If it’s about maintaining and growing a market share of supply, I think hardly. To gain dominance over the market, definitely not. To get some foundries installed in the EU and shorten the value chain, defo yes. To which extent is a big question.”

• 👍 S.B: “It's a start!”