In Geopolitics Today - Thursday, October 14th
The Coup in Guinea Impacts Price of Aluminium and 13th Round of China-India Military Talks End in Failure
The Coup in Guinea Impacts Price of Aluminium
Following the coup carried out by a special forces team in Guinea last month, the price of aluminium has skyrocketed worldwide. Guinea is a major producer of bauxite: a primary ore used in the production of aluminium. The country produced roughly 77.8 million tons of bauxite in 2020, which represented 21.8% of the global supply. Therefore, the production and export of bauxite from Guinea serves a critical part of the global supply of the widely-applied aluminium. The coup has caused severe disruptions to the supply of aluminium, impacting producers the world over.
Guinea is a nation with some of the world’s largest deposits of bauxite ore, and stands out as the number one bauxite-producing country of the world. For this reason, the supply of bauxite from the country has an important role in the stability of the global aluminum market. The critical role of Guinea to this market was demonstrated just hours after the coup took place, as aluminum prices rose to their highest level in a decade. Surging aluminum prices have driven up the cost of everything that the metal is used for, from kitchen foil to beer. But the surge in the price of aluminium will have a more drastic impact on the automobile industry.
With the gradual transition of the car industry to electric vehicles (EVs), it is expected that demand for aluminium will only grow in the years to come. The unique features of the metal make it more preferable to steel in the eyes of manufacturers. The metal’s corrosion resistance, shock absorption, and lighter weight make it an ideal metal for the manufacture of EVs. With the weight of batteries constituting a significant weight burden in the manufacturing process of EVs, car makers have increasingly relied on aluminum to keep their products lightweight. As such, severe disruptions to the supply of aluminium are sure to increase the costs associated with the manufacture of EVs.
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13th Round of China-India Military Talks End in Failure
The armed forces of India and China have been locked in a standoff in eastern Ladakh along the Line of Actual Control (LAC), which serves as the de facto border between the two countries. In April last year, People’s Liberation Army soldiers began crossing the LAC at several points in Ladakh, constesting the remote region until tensions exploded in fighting that resulted both sides losing troops. Since then, both sides have been engaged in talks to de-escalate the tense situation along the LAC attempting to facilitate a joint disengagement of troops.
This month saw the latest round of talks between the military commanders of Indian and Chinese armed forces collapse. The two sides came out of their discussions laying the blame on each other. China accused India of negotiating in bad faith by persisting with “unreasonable and unrealistic demands.” India denied Chinese claims, and argued that it had “made constructive suggestions” aimed at resolving the dispute in eastern Ladakh. Indian officials accused their Chinese counterparts of being unable to “provide any forward-looking proposals.”
While previous rounds of talks did not always produce agreement, statements released following discussions often included some positive signals in the past. That was not the case following the latest round of discussions, as both sides lashed out at each other in their respective statements after talks had concluded. There has been a noticeable hardening of positions as each appears more and more willing to engaged in muscle-flexing. That both China and India have show little commitment to talks is worrying. Both sides are reported to have amassed large amounts of troops and weapons near the LAC, and the breakdown of talks means that these soldiers will likely have to spend another winter along the border.
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