Monday, July 31, 2023
Evening News with MarkZ 07/31/2023
"Bolivia has the World's Largest Lithium Reserves. Is it Worth Investing In?" BY IVAN CASTANO, 31 JULY
Bolivia has the world’s largest reserves of lithium, the new ‘white gold’ Tesla (TSLA) and rivals such as General Motors (GM) or BMW (BMW) are rushing to procure to make increasingly-demanded electric vehicles (EVs).
With 80 million metric tons (MT), the impoverished nation’s troves of the silver-white metal trump neighbors Chile and Argentina’s own reserves. These three countries, which comprise the so-called Lithium Triangle, hold more than two thirds of global reserves. Chile is the world’s second largest producer with 39,000 annual tons, ranking just behind Australia. Argentina, in turn, makes 6,000 tons, according to the U.S. Geological Survey.
Bolivia, however, has failed to catch up, hurt by political turbulence and technological setbacks. It currently makes just 600 tons a year through a pilot plant held by state-owned producer Yacimientos de Litio Bolivianos, though it plans to boost it to 15,000 tons in the coming year.
Global EV giants, however –notably China’s battery supplier Contemporary Amperex Technology, which counts Tesla and Ford (F) as customers – are set to plough billions into Bolivia to help it churn out 300,000 tons of lithium between 2025 to 2030. This as demand for the silver-white metal, also used to make cell phones and laptops, is set to rise five-fold by 2030, according to consultancy Li-Bridge.
CATL will build two facilities in the fabled Uyuni salt flats, home to the bulk of Bolivia’s reserves but also a major tourist attraction and the set of past Star Wars films. It plans to initially produce 100,000 tons, then ramp up with additional investment. On top of this, China’s government-backed Citic Guoan Group and Russian state energy firm Rosatom will earmark $1.4 billion to extract another 100,000 tons of the world’s lightest metal.
Eyeing opportunities
For starters, they can invest in a slew of publicly-traded companies including CATL but also Chile’s Sociedad Quimica Minera (SQM) and Australia’s Albemarle (ALB) and Lion Town Resources (LINRF), all of which are rushing to mine lithium in Bolivia, South America and around the world.
“The best thing investors can do right now is to invest in Chile and Argentina” where mining firms are also allowed to own state lithium resources unlike Bolivia where the constitution bans it, said industry expert and Texas A&M University professor Diego Von Vacano. “You have SQM and Albemarle who are major global companies with proven businesses all over the world. Then there is Lake Resources, which is working to unearth 50,000 tons from Argentina by 2030, pitting itself against the likes of Rio Tinto which is also looking to muscle in the country.
EnergyX’s Bet
Von Vacano, who advised Bolivia’s President Luis Arce on his latest lithium investment initiatives, also likes U.S.’s EnergyX which recently completed a pilot project to obtain lithium through a new technology called direct lithium extraction (DLE). The site, located in Uyuni, had 94% “recovery rates,” a term used to describe the purity of the metal as extracted from brines or deposits, using much less energy and water than competing facilities. EnergyX raised $50 million in April through a GM-led funding round.
“Of the 9 firms that bid for Bolivia’s projects, EnergyX was the only one that actually had a viable project for Bolivia. They had very good results and they plan to replicate the project in Chile and Argentina,” added Von Vacano.
Regarding the future, he expects Bolivia will schedule a second bidding round in the next 12 to 18 months to enable U.S. and/or European entities to develop lithium projects. Next time, however, the process should be more competitive as the government is expected to approve a much-awaited law to govern the industry.So how can investors profit from Bolivia’s EV ambitions?
Legal Framework
Called the Law of Lithium and Evaporitic Resources, the bill is expected to provide greater clarity on how much lithium, if any, foreign entities will be allowed to own. Simultaneously, it will outline how much Bolivia’s different regions (such as Uyuni’s home, the Potosi Department) will receive in royalties.
Von Vacano expects the bill to clear Congress early next year, possibly allowing foreign firms to strike joint ventures with the government where the former will own 49% and the latter 51%, a similar structure that’s been used in the breadwinning natural gas industry.
Institutional investors, such as Aegon Asset Management, say Bolivia must do more before they can consider backing its lithium ambitions.
“It’s not something I am looking at,” said Jeff Grills, who heads EM debt for the New York-based firm, adding that the fledgling projects won’t have a near-term benefit on the nation’s economy or worsening debt profile.
He added, “I haven’t even tried to look at Bolivia’s lithium potential because it’s very hard to get information and future return projections. I am more concerned about the country’s economic projections and debt ratings. Bolivia is a country with high debt, very little liquid reserves and a large fiscal deficit.”
Grills expressed concerns about whether the landlocked nation will be able to pay its nearly $2 billion in debt as $1 billion and $850 million in sovereign bonds comes due in spring 2028 and 2030.
"US AMBASSADOR ANNOUNCE SUCCESS OF HER MEDIATION BETWEEN CBI & US TREASURY", 31 JULY
The US ambassador in Baghdad announces the success of her mediation between the Iraqi Central Bank and the US Treasury
Coffee with MarkZ 07/31/2023
"PROCEDURES TO LIMIT THE RISE IN THE EXCHANGE RATE OF USD AGAINST IQD", 31 JULY
Starting Procedures To Limit The Rise In The Exchange Rate Of The Dollar Against The Dinar
The Iraqi Trade Bank decided to expand the scope of the external financial transfer process for merchants. The media expert of the bank, Aqil Al-Shuwaili, said in a statement: “Based on the directions of the Presidency of the Council of Ministers and the Central Bank of Iraq to limit the rise in the exchange rate of the dollar against the dinar in the local markets, and to support the import process in accordance with the legal frameworks and correct and sound contexts to ensure the safety of financial transfer operations, which are positively reflected.” On individual merchants and shop owners, the Trade Bank of Iraq (TBI) decided to take the initiative to expand the scope of the external financial transfer process.
He explained, "This will be done by allowing the aforementioned groups to import consumer goods at the exchange rate of the Central Bank of Iraq 1320 dinars per one dollar, provided that the value of the external transfer for each individual trader per month does not exceed ($100,000 only one hundred thousand dollars)," indicating, "It will be Work on this matter, starting with the bank’s branches in the capital, Baghdad, and the work will be expanded in other branches outside Baghdad soon, according to the instructions of the Iraqi Trade Bank.
Below are the requirements for opening an account for individual merchants and shop owners as follows:
1- Identification documents: Civil status identity, Iraqi nationality certificate or unified national card, housing card, Iraqi passport, or submitting an undertaking to provide us with the passport as soon as it is issued.
2- Submitting what shows the deposited sources of income (sale receipts or contracts for periods not exceeding the previous six months) or any other documents that show that.
3- Submit proof of work address (lease contract or real estate deed).
4- Fill in the Know Your Customer (KYC) form.
5- A valid Chamber of Commerce ID (if any).
6- Provide evidence of the merchant's activity.
7- Submitting an undertaking that the individual trader will not own a company registered now or in the future. https://www.radionawa.com/all-detail.aspx?jimare=35227
The Decline In The Exchange Rate Of The Dollar In Iraq
Economy | 10:56 - 07/30/2023 Baghdad - Mawazine News Today, Sunday, the exchange rates of the dollar recorded a decline in the local markets in Iraq.
The selling price of the dollar was 151,000 dinars per 100 dollars, while the buying price of the dollar was 150,000 dinars per 100 dollars. https://www.mawazin.net/Details.aspx?jimare=232333
Adviser To The Prime Minister: Measures To Stabilize The Dollar Exchange Rates
Economy | 02:13 - 07/30/2023 Baghdad - Mawazine News Today, Sunday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, announced a movement to stabilize the dollar exchange rates, stressing the provision of soft financing operations for importers at the official exchange rate.
Saleh said, "The foreign trade of small traders constitutes the highest number in the import commercial market activity, and its rate may reach 60 percent of the local market's needs for imported goods."
He added, "With the aim of dismantling the monopolistic financing trade ring to finance foreign trade and the entirety of external transfer operations resulting as dangerous mediating forces that carry a lot of colored noise between the small trader and the financing of trade in foreign currency, whether in the position of international compliance or the disposal of foreign currency outside the stability controls,
in addition to its danger in spreading A dangerous pricing pattern based on floating the prices of goods and services at the parallel market exchange rate, which leads to a dangerous transfer of inflation from the exchange market to the general level of prices and endless price disturbances.
Therefore, the Iraqi Trade Bank works with direct openness in providing soft financing operations for small importers and at the official exchange rate outside the loop. the monopolist".
He pointed out, "This matter will lead to providing a flexible commodity supply and help to establish stability in the parallel exchange market, in addition to removing the forces of commercial monopoly from the most dangerous mediation process between small traders and the exchange market, in a way that achieves stable competitiveness in which the parallel exchange rate matches the official exchange rate." gradually". https://www.mawazin.net/Details.aspx?jimare=232351
TIDBIT FROM FRANK26, 25 DEC
Frank26 The introduction of all these foreign currencies [to transact in for import/export] is the introduction of the international...
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Frank26 [Bank story] This time we didn't go down, we just called [the bank]... We said we want to see if we can exchange some cu...
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Bank appointment for Currency EXCHANGE Instructions/Checklist Bank Name_________________________________________ Bank 800#____________...
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Walkingstick All these meetings that the CBI had with all these agencies that were helping them with their monetary reform are done. Al...