In Geopolitics Today: Thursday, October 26th
EU Divisions on Israel-Hamas Expose Fragmented Bloc Unity, Zambia Secures Debt Restructuring Agreements, and other stories.
Indonesia's Nickel Ambitions Tied to Electric Vehicle Expansion Plans
Indonesia is aggressively developing its electric vehicle (EV) industry by leveraging vast nickel reserves. Chinese and Korean firms dominate mining, processing and battery production for EVs so far. Indonesia pushes localization to move up the value chain. But US and European carmakers and suppliers have been slow to commit, constrained by regulations and lack of battery expertise.
The disconnect shows challenges in aligning green and economic goals. Indonesia's control of critical minerals is a strategic asset as nations vie for supply security. While desiring Western technology, Jakarta balances pressures for localization. For the West, priorities like friend-shoring collide with the realities of China's EV dominance. As the EV revolution accelerates, reconciling competing demands will test international cooperation on decarbonization.
Read more about this story here.
EU Divisions on Israel-Hamas Expose Fragmented Bloc Unity
The Israel-Hamas crisis has exposed deep rifts within the EU, contrary to claims of bloc unity. Discord erupted publicly between officials over stances and aid policy. Leaders like von der Leyen faced rebukes for perceived bias, even by EU diplomats. Competing views split member states based on history and sympathies.
Positions span from strong Israeli backing to urging accountability on civilian deaths. But a disjointed EU risks incoherence, undermining crisis management and its geopolitical aspirations. The disarray reveals the difficulty of consensus on such polarizing issues. While united on Russia, the EU fractures over the Middle East. Internal tensions pit institutions and leaders against each other, breeding distrust. Visions of acting as a coherent power falter without strategic alignment.
Read more about this story here.
Slovakia Changes Stance on Military Aid to Ukraine
Slovakia's new Prime Minister Robert Fico announced this week that his country will stop providing military aid to Ukraine. This represents a major shift in policy for Slovakia, which has been one of Ukraine's staunchest supporters within NATO. Fico campaigned on halting military aid and said Slovakia should be focused on providing only humanitarian assistance.
This policy change has mostly diplomatic implications. Slovakia was one of the first countries to provide major weapons systems to Ukraine, helping bolster its defences in 2022. Its withdrawal of military aid could signal wavering resolve among some NATO members to continue robust support. Russia will likely see this as a small but symbolic win, validating its strategy to wait out European resolve. Much will depend on whether other nations follow suit, or if Slovakia remains an outlier. If support does erode, it could constrain Ukraine's military capacity and strengthen Russia's hand in any potential talks.
Read more about this story here.
DRC Attracts Investments in Copper and Cobalt
The Democratic Republic of Congo is seeing renewed investment in its copper and cobalt mines. Eurasian Resources Group recently announced an $800 million project to revive the dormant Comide mine, aiming to produce 14,000 tons of cobalt annually. The nation holds the world's largest cobalt reserves, making it critical for electric vehicle battery production. Earlier this year, a privately held Congolese firm Buenassa Sarl also announced plans for a new $350 million copper-cobalt processing plant.
The DRC's central role in cobalt and copper production gives events in the country significant influence over the prices of key industrial metals. More investment could help solidify the DRC's position as other nations compete for market share of green energy minerals. However, scrutiny over mining practices remains a valid criticism. Nevertheless, stable production from the DRC's mines will be critical for supporting the West's global transition to electrification and reducing reliance on fossil fuels. Managing the complex dynamics around mining in the DRC will be an ongoing challenge with high stakes for both local populations and outside powers.
Read more about this story here.
Zambia Secures Debt Restructuring Agreements
Zambia has reached a debt restructuring agreement with a key group of bondholders. The deal offers relief on $3 billion of Eurobonds, lowering interest payments and extending maturities. This follows recent breakthroughs in negotiations with China and other creditors to rework $6.3 billion in debt after Zambia's 2020 default. The agreement could enable Zambia to move forward with a $1.3 billion IMF bailout program that was contingent on debt sustainability.
The drawn-out Zambian debt saga was seen as a test case for restructuring processes when Chinese creditors are involved. But while China did make some concessions, it avoided face value reductions. This means uncertainties persist around equitable burden sharing between private and state creditors in future renegotiations. Still, Zambia's deals unlock significant short-term financial relief after prolonged economic struggles. Finalizing negotiations will be positive for restoring market access and confidence. Zambia's path shows progress, but also the limitations in coordinating multifaceted restructuring.
Read more about this story here.
Turkmenistan and Turkey Explore Natural Gas Cooperation
Turkmenistan and Turkey are exploring cooperation on natural gas transportation, including potentially utilizing a Trans-Caspian pipeline to Europe. With plans to double capacity on the Trans-Anatolian pipeline, Turkmenistan eyes a potential new export route. However, tensions have emerged over Turkey's treatment of Turkmen nationals and passport restrictions in Turkmenistan.
While energy links deepen, political frictions persist. As Turkmenistan balances ties between regional powers, its authoritarian policies and closed borders remain contentious. Ankara cooperates on security despite concerns over human rights. For Turkmenistan's economy, Turkey provides a lifeline westward. Yet for dissidents, options narrow as both nations tighten controls. Managing differences and dissent will shape the latitude of the blossoming partnership