5 things you need to know before the markets open in Australia and around the world.

1. Bolivia Chooses Chinese Consortium To Help Launch $2.3bn Lithium Project

The Bolivian government announced on Wednesday its choice of a Chinese partner to help in local lithium production, giving China a potential foothold in access to the vast untapped reserves of the valuable electric battery metal. Xinjiang TBEA Group Co Ltd will take a 49 per cent stake in a joint venture with the Bolivian state lithium company YLB. 

The two companies will combine to produce lithium and other materials from the Coipasa and Pastos Grandes salt flats mines in the Bolivian Andes. The estimated investment will be at least $2.3 billion over the course of the project.

This region of Bolivia contains some of the world’s largest reserves of lithium, which is a key ingredient in the batteries that power electric cars, cellphones and laptops. The country has not yet managed to produce the metal at a commercial scale.

The deal marks an important opportunity for Beijing after Bolivia last year chose German firm ACI Systems GmbH as a strategic partner for Bolivia’s largest lithium deposit in the Uyuni salt flats.

The current project saw the Chinese firm beat out six rivals for the coveted partnership, with rival firms including ACI, Uranium one – a Russian state nuclear company subsidiary – and the Irish company Clontarf Energy Plc.

Hailed by China’s ambassador in La Paz as “historic”, the deal marks an important step for a Chinese market that needs 800,000 tons of lithium per year by 2025 to support its growing electric vehicle industry.

There are currently no official estimates for the lithium content of the Coipasa and Pastos Grandes sites.

2. Trump Set For Meeting with North Korea’s Kim in Vietnam this February

U.S. President Donald Trump this Tuesday revealed he would be holding his second meeting with North Korea’s Kim Jong Un in Vietnam on Feb. 27-28. In his speech announcing the move, he gave himself credit for averting a major war on the Korean peninsula. 

Trump used his annual State of the Union address to Congress to highlight his plans, saying that much work was needed to create the conditions for peace with North Korea. He cited the halt in its nuclear testing and the lack of missile launches over the past 15 months as proof of progress in this area.

Trump stated his belief that the country would “be in a major war with North Korea” if he hadn’t been elected as president. This follows fears of war in 2017, when Trump threatened to rain “fire and fury like the world has never seen” on North Korea, following their nuclear missile threats.

Kim and Trump went on to meet on June 12 in the first summit between an acting U.S. president and a North Korean leader. Despite a lack of progress since then, Trump has been eager to hold a second summit, claiming his relationship with Kim “is a good one.”

South Korea welcomed the announcement by hope and expressed hope for progress on improved relations.

Communist-ruled Vietnam is set to play host to the event, as it has good relations with both the United States and North Korea. The country has also been held up as an example of successful economic and political reform for North Korea to follow.

3. Brussels Set for Brexit Renegotiations as May Travels to Brussels

Prime Minister Theresa May arrived in Brussels on Thursday following the British Parliament’s request to amend the controversial ‘backstop’ agreement. The UK leader is set to ask EU leaders to change the deal that was negotiated last year in order to be able to pass it through Parliament, however EU leaders have previously suggested that they would not renegotiate any part of the agreement. 

With just 50 days to go before Britain is scheduled to leave the European Union, May this week met with European Commission President Jean-Claude Juncker amidst a tense political backdrop.

EU summit chair Donald Tusk on Wednesday bluntly stated that Brexit promoters deserved “a special place in hell”, revealing the frustration currently manifesting itself in Brussels.

May faces the challenge of renegotiating a deal that was rejected by the biggest majority in modern British parliamentary history. EU leaders have repeatedly said it would not be possible to replace the most contentious part of the agreement, known as the “backstop”, designed to ensure no hard border between Northern Ireland and Ireland.

Without the approval of Parliament, Britain will be on course to leave the EU on March 29 with no transition agreement in place, which many businesses fear could be a disaster for the economy. Other options include delaying Brexit, running a new referendum or cancelling it entirely.

May is next week expected to return to parliament for a debate on Brexit negotiations, with a crunch vote on approval for the Brexit deal likely to come later in the month.

4. Lithium Ion Battery Market Estimated to Grow at CAGR of 16.2% between 2018 and 2024

With growth fuelled by increased demand for plug-in vehicles, battery-operate material-handling equipment, smart devices and other industrial goods, the lithium ion battery market is expected to grow from USD 37.4 billion in 2018 to USD 92.2 billion by 2024. Safety issues such as the storage and transportation of spent batteries however still currently impede market growth. 

Electric vehicles, which require high capacity and high power, can only run on the provision of a lithium type of battery. The lithium nickel manganese oxide (li-NMC) cell is growing in range as it is being developed for a wide range of applications from the automotive industry to energy storage system.

The market for electric vehicles is expected to grow at a higher CAGR during the forecasted period. This follows increased demands for energy-efficient solutions, funding drives from venture capital firms, and government initiatives that encourage the shift away from petrol-powered vehicles.

The APAC market is expected to grow at the highest CAGR during this period, with government initiatives and strict regulations supporting the growth of electric vehicles in these markets.

5. Flying Taxis May Soon Take Off, But Regulations And Infrastructure Still Unclear

This week saw the unveiling of a hybrid-electric propulsion aircraft by American aerospace company Bell, while Boeing Co landed its first test flight of an autonomous passenger air vehicle. Before reaching the wider market, however, many regulatory, manufacturing and infrastructure hurdles will need to be overcome. 

Uber is aiming to have its UberAIR service operational by 2023 with the launch of piloted taxis powered by electricity, with minimal noise and vertical take off and landing capabilities. Yet the regulatory environment for electric vertical take off and landing aircraft is problematic.

MacroPlan Dimasi executive chairman Brian Haratsis told The Fifth Estate that there are currently no connections between the Civil Aviation Safety Authority and the land use planning authorities, meaning that airspace and landing space are currently not intertwined.

Haratsis believes that future regulation will need to take into account land use and above land use, with aircraft initially following existing road and rail infrastructure.

Australia may provide a suitable area for early adoption with its low density and long travel distances. The market is still relatively young, with Bell’s hybrid-electric propulsion aircraft marking “the first serious commercial entry” in a field of competitors that would likely struggle to manufacture at scale. 

The new technology may diminish the distance premium, with Cofounder of residential property management start up Different, Ruwin Perera, believing this will mean, “people can live where they want.”

Andrew Mortimer
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