China Steals A March In Global Battle For EV Battery Market

IN THE BATTLE to control the critical industries of the future, score one for China.

Bolivia has chosen a Chinese-led consortium, CBC, to extract the lithium, a rare earth essential to the batteries that power electric vehicles (EVs), that lies in significant quantities under the South American country’s salt flats.

CATL, China’s leading EV battery maker, and the mining company CMOC (the old China Molybdenum) are prominent members of CBC. Bolivia’s state-owned Yacimientos de Litio Bolivianos (YLB) will front the project.

Bolivia’s laws require the state to exploit the country’s natural resources. Bolivia’s energy minister, Franklin Molina, made a point of saying the deal with CBC showed there were ‘sovereign alternatives to the privatisation models of lithium exploitation’.

Bolivia and neighbours Argentina and Chile sit atop the so-called ‘lithium triangle’, which contains more than half the world’s reserves. Hitherto, YLB has not been particularly successful in commercialising Bolivia’s deposits, which is why the government in 2021 called for foreign partners to participate. CBC outbid Lilac Solutions from the United States, the Uranium One Group from Russia and three other Chinese companies.

China already dominates the world’s lithium production through its processing capacity, which gives Chinese battery makers a cost advantage over foreign rivals.

CATL’s decision to squeeze efficiency gains from an older-generation lithium-ion phosphate battery technology rather than betting on newer alternatives has further enhanced its market position, generating the revenue to reinvest in other technological development that keeps it as a world leader.

German automakers have been courting it as a partner, as have several EU governments keen to create jobs in the sector and feeling irked that they have been cut out of the subsidies for EV production under last autumn’s US Inflation Reduction Act.

These subsidies are diverting investment from Europe, potentially including investment by Europe’s leading homegrown battery maker, Northvolt, which is reconsidering its plans to open a plant in Germany.

CATL, exploiting the opportunity, is considering opening a third battery factory in Europe.

Companies’ Growing Role In Natural Disaster Relief

Multinationals are taking an increasingly prominent relief role in humanitarian disasters, including those in China. The Center for Strategic and International Studies, a Washington think tank, has put the subject under its microscope, finding that corporations have become a central component of the international response to natural disasters. The likes of Coca-Cola and Cisco were bigger contributors to Sichuan earthquake relief than the U.S. government (if not bigger donors than the general public). The Center sees the trend as part of an expanding notion of ‘corporate global citizenship’, though in the case of Chinese disasters, it notes, it may be as much smart local brand building.

The Center dates the trend to the 2004 Indian Ocean tsunami. It excites policymakers, for all the differences in values and organizational cultures that exist between the private and public sectors. Companies bring cash but also a new disaster assistance network through their globalized and local personnel, supply chains and customers–and a desire to protect all three. Policy makers should remain realistic in their expectations, however. Relief for both domestic and international disasters accounts for less than 3% of all corporate donations, the Center notes.

Each natural disaster is unique in its own way. Beijing had the resources to deal with the 2008 Sichuan earthquake, unlike, say the Haiti government in the wake of the 2010 earthquake there. Yet U.S. corporations still donated an estimated $110 million toward relief of the Sichuan disaster, even if they were seen as “driven by commercial calculation rather than by acute humanitarian concerns”, the Center says. Up to a further $30 million was given via the Red Cross. The U.S. government itself gave just $5 million. The Business Round Table and the U.S.-China Business Council were instrumental in corralling U.S. multinationals to give in Washington’s stead.

Here is a list of the four most generous U.S. corporate donors for the relief of the Sichuan earthquake, one of the five big disasters examined for the Center’s study. The numbers include cash, in-kind donations and employee contributions.

• Cisco: >$45 million
• Coca-Cola: $15.6 million
• Procter & Gamble: $7.6 million
• Johnson & Johnson: $5 million

Seriously generous numbers.

This is all evolving ad hoc. In the U.S., the Business Civic Leadership Center at the U.S. Chamber of Commerce is emerging as the coordination point between the corporate, governmental and non-governmental organization worlds. UN agencies and the Global Economic Forum (Davos) is tickling forward the global agenda. There is interesting cooperation going on between companies and disaster relief agencies to enable corporate management and organizational skills and technologies to be deployed in the field at the time of disaster and to raise the core capacities of relief agencies over the longer term. As was demonstrated in the U.S. after Hurricane Katrina, a retailer like Wal-Mart is much more practiced than government disaster management agencies in distributing large volumes of basic supplies to a lot of people quickly. This is all beyond our immediate remit but gone into in some detail in the Center’s report, though the examples are mostly U.S.-centric.

From the ash-gushing Icelandic volcano to the Fukushima nuclear disaster, natural disasters can readily disrupt global supply chains. Disaster risk reduction may not have the feel-good factor of disaster relief for corporate donors, but private-sector engagement in these areas, though still rudimentary, is just as vital. That is not just about social responsibility. It is also, as the report notes, “about economic risk management and the longer-term vitality of consumer societies”.

While business may not be in the business of disasters, it decreasingly stands by, if it ever did, when disaster strikes. For multinationals in China, preparation is understanding where a company can be helpful and at what points in the system it can make their offers of assistance. For Chinese companies abroad, it is something to understand that this is becoming yet another dimension of being a multinational.

Disaster Recovery Lessons For Sichuan From The ADB

In a typical year, up to 200 million people are affected by natural disasters in China and 40 million hectares of crops are damaged. The average annual economic impact from disasters, be they earthquakes, typhoons and floods or droughts, is 100 billion yuan ($14.5 billion).

No natural disaster, by officials’ own admittance, has been more challenging to China than the 5-12 Sichuan earthquake of 2008, if nothing else than by dint of its sheer magnitude. The area affected was about the size of South Korea, the number of victims requiring resettlement more than the population of Spain  and the overall number of people affected more than the population of Canada. Similarly unprecedented was the scale of response required.

The National Development and Reform Commission (NDRC) asked the Asian Development Bank to see what best-practice recovery essons could be learned from such other large scale natural disasters such as the Kobe earthquake of 1995, the Aceh earthquakes and tsunami of 2004 and 2005 and Hurricane Katrina in the U.S. in 2005.

The ADB has just published its findings. It gives China good marks for its quick response to the disaster, noting that the capacity of policymakers to react quickly to natural disasters is important, as speed of response is a key for restoring market confidence and contributing to a feeling that pressures faced may be temporary. But it also questions decisions such as the one to relocate the county seat of Beichuan, 70% destroyed by the earthquake, to a new city 35 kilometers away. The report says that damaged cities are almost always rebuilt on the same site rather than relocated to safer territory, and that the relocation of a city after an earthquake is “not a simple concept”.

It also notes that the disaster literature abounds with examples of decision- and policy-makers at all levels of government failing to implement essential public safety measures, and then avoiding accountability when failure inevitably occurs. It says:

The PRC appears to be no different: as recently as August 2006, in a keynote speech to mayors at a China Mayors’ Association forum on urban development, Vice-Premier Zeng Peiyan warned that many municipal governments are weak in urban management and disaster prevention, and exhorted mayors to abandon “blind expansion of cities” and to focus on increasing disaster preparedness and prevention. The apparent failure to adhere to building codes for public buildings such as schools supports the Vice-Premier’s statement.

The ADB derives scores of specify lessons from the disasters that it has studied that could be applied to the recovery from the Sichuan cake. All should be required reading for any official and civic leader in any part of China where natural disasters threaten, i.e. pretty much everywhere.

They can be summarized:

• Inter-governmental coordination is vital:  Each level of government has specific responsibilities in every aspect of disaster management (hazard mitigation, disaster preparedness, disaster response, disaster recovery). Overall effectiveness, however, can be measured by the degree to which these various components are integrated:
• Timing is important: Recovery actions initiated too early or too late can have significant downstream implications. Hasty decisions on what and where to relocate typically fall in this category. Similarly, some decisions that are delayed, such as victim compensation measures or new building codes may interfere with smooth recovery procedures.
• Recovery implies physical, economic and social integration: The desire for rapid physical structural results must be balanced against the need for equitable and sustainable long-term economic and social solutions. Aspects such as livelihood assistance and social integration programs need to be dealt with concurrent with the quality reconstruction of damaged structures.
• Process and participation is as important as the physical: Disaster recovery is all about re-building communities. Who decides and how decisions are arrived at with respect to physical recovery is of utmost importance.
• Focus on content as well as construction: Too often the onus is placed on the rapid physical reconstruction of structures, such as school, hospitals and critical service infrastructure, without decisions being made to re-visit content, such whether the school curriculum or teacher training was adequate to meet the wider needs of society, or if underground cabling is better for ‘all-hazards’ risk reduction than overhead wiring, for example, in seismic areas also prone to high wind/severe storms.
• Incorporate disaster risk reduction components: Disasters do strike twice! Rebuilding after a disaster is an opportunity to get things right the second time around and to “build back better!”

The Stress Of Earthquake Rescue: Lessons From Sichuan

Word arrives from our man in Australia about long-term health problems being suffered by rescue workers involved in the Sichuan earthquake in 2008. Dr Wei Qiang Zhang from the Beijing Military General Hospital and Dr George Liu from Latrobe University in Melbourne led a team of Chinese and Australian researchers who looked at the after effects on 1,187 soldiers deployed to the rescue and relief operations. They found a high incidence of health problems including fatigue and depression as well as physical ailments such as skin and respiratory problems and abdominal pain and diarrhea. The results are reported in the Australian and New Zealand Journal of Public Health.

Liu makes the point that soldiers, because of their military training, are in better shape to deal with rescue efforts than civilian volunteers, who, he believes, are much more likely to suffer mental or physical harm in such circumstances as they lack the professional training to cope with the stress of long hours and arduous often dangerous conditions. However, he also notes that the soldiers fared worse than other professionals such as fire-fighters and Red Cross workers because they were less well equipped, lacking in particular protective clothing and masks.

 

More Rains Trigger New Landslides

More torrential rain in the northwest has triggered renewed deadly landslides in the region and is severely hampering rescue work at Zhouqu (below), where new mudslides have blocked roads making it difficult to bring in supplies and equipment to the remote mountain town while emergency shelters have been flooded.

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With 600 still missing in Zhouqu, concerns are increasing among public health officials that undiscovered bodies and dead animals buried under the mud are increasing the risk of disease from contaminated water. The official death toll from last weekend’s inundation of Zhougu is now put at 1,144. Authorities report a further 24 killed elsewhere in Gansu and five further south in Sichuan as a result of the latest landslides.

The debate about the extent to which these are natural or man-made disasters is growing. The latest landslides occurred in regions where there has been extensive illegal logging on mountains already unstable because of the construction of small hydroelectric dams, mining  and road building, and weakened further by the Sichuan earthquake of 2008. “The tragedy in Zhouqu is a reflection of the challenges and risks economic growth brings to poor regions,” Li Yan, a campaigner for Greenpeace China, told the French news agency.”Local governments are under pressure to alleviate poverty and develop the economy. In that process, there is environmental damage and degradation.”

5/12 Quake One Year On

The first anniversary of the Sichuan quake that killed nearly 90,000 and displaced hundreds of thousands more is upon us.

It would be cheering to think the coverage would be about a mix of remembrance and rebuilding, physical, social and emotional. While there has been some of that, and that should not be underestimated: officials are aiming to complete reconstruction by September, a year ahead of schedule, the BBC’s Michael Bristow says, the world’s attention has been drawn more to attempts by the authorities to suppress any opportunities for aggrieved parents to use the occasion to press for an official investigation into why so many of their children died, particularly in the collapse of what parents claim were shoddily built schools.

An official report, published last week, said there was no grounds for believing the school buildings were substandard, though that was based on the evidence of the original blueprints, begging any questions about construction standards. There is plenty of local anecdotal evidence that many of the schools had been badly constructed, as their disproportionate destruction compared to other buildings would suggest.

Official efforts to prevent parents pressing for recourse either through the courts or administrative channels have been severe. Control of domestic and foreign media in the run up to the anniversary has been as strict. Some foreign reporters have complained of harassment (see: China Cracks Down On Foreign Journalists); domestic press just told to avoid anything sensitive. The window of openness that occurred for a few weeks after the terrible events of May 12, 2008 is again closed, leaving sorrowed hearts in deeper shadow.

Quake Not Graft Responsible For Sichuan School Collapses, Official Word

The strength of the quake, not shoddiness of construction was the main reason that so many schools collapsed during last May’s devastating earthquake in Sichuan.

So says the province’s executive vice governor, Wei Hong, basing his judgment on an investigation by provincial officials and engineers from Tsinghua University. Wei also said that the official death toll of schoolchildren still hadn’t been calculated. But then it is only 10 months since the quake struck.

Grieving parents and those who have braved official harassment to protest the lack of holding anyone to account for the collapse of some 7,000 schools while nearby buildings such as party offices survived are unlikely to be satisfied on either count.

Wei’s remarks were made a news conference during the National People’s Congress. What this Bystander isn’t sure about is whether the investigation Wei mentioned was the same one Beijing promised into possible corruption connected to the construction of schools. Or are we all meant to have forgotten that as it is the quake that is to blame?

Sichuan Earthquake Survivors Still Vulnerable As Winter Approaches

This week marks the six months anniversary, if that is the right word,  of the May 12 Sichuan earthquake that killed more than 80,000 people. Fifteen million survivors in Sichuan, Gansu and Shaanxi were displaced. The Red Cross reminds us that many of them remain in temporary reed matting shelters which will be inadequate with the onset of winter, especially in the mountains. The Red Cross says that while “the rapid response of the government in rebuilding homes is clearly visible,”…”full recovery is expected to take a further two and a half years, including reconstruction of tens of thousands of homes, as well as schools and health clinics.” It says will make emergency cash grants to the most vulnerable, particularly the elderly  to help get them through the winter, and continue to distribute supplies such as quilts, medicine and food.

Meanwhile, a 6.5 magnitude earthquake was reported today to have struck Qinghai province in the north west 160 kilometers north of Goimud, the industrial city that is the railhead for Tibet. Some homes were destroyed, but no reports of casualties so far, according to official reports. The U.S. Geological Survey has maps.

Reliefweb has a map of the 6.4. magnitude quake that struck north west of Lhasa on October 6, killing 30 people. Snapshot below:

Oct. 6 2008 Damxung County Earthquake

Mission Accomplished

“The successful earthquake relief efforts fully proved, once again, the superiority of the socialist system, the governing capacity of the Communist Party of China (CPC) and the government, the abilities of the People’s Liberation Army, and the strength of the Chinese nation.”  So starts Xinhua‘s report of Prime Minister Wen Jiabao’s remarks at a meeting in Sichuan earlier this month on rebuilding after the devastating May 12 earthquake.

And probably in that order. Wonderfully old school in its way.

Quake-Flattened Sichuan Schools Were Shoddily Built – Official

An official has at last admitted what many parents in Sichuan have believed since the devastating May 12th earthquake: that schools that collapsed could have done so because of shoddy construction and inferior materials.

The admission has weight as it comes from Ma Zongjin, a geologist who chairs the technical committee set up to investigate the quake. “In recent years, a lot of school buildings have been built in China and in this process of rapid development, some problems may exist,” Ma said Beijing. “The structure of the school buildings may not be reasonable enough and the related construction materials may not be strong enough.” Here via Xinhua.

The issue has become a sensitive political matter, with parents of dead children staging protests to demand investigations into why schools collapsed even though nearby buildings were left standing, and officials trying to brush the protests under the rubble. Whether Ma’s comments leads to local and provincial officials being held accountable is a moot point.

The committee also said that the damage to property amounted to $123 billion, and that 18,000 people still missing were unlikely to have survived. That would take the death toll to 88,000.