The historic transition from the century-long era of the internal combustion engine to the electric-vehicle age is creating flashpoints in surprising corners of the world economy. And it’s only just beginning.
The stakes are enormous: BloombergNEF forecasts the cumulative value of all forms of EV sales will hit $8.8 trillion by 2030 and $57 trillion by 2050 in its base case scenario. That jumps to over $88 trillion by the middle of the century if the world ditches its gas-guzzling vehicles even more quickly.
Still, decades after first discovering the metals, little has been done to further develop the area. The region serves as a vast carbon sink that environmentalists and local indigenous communities view as critical to preserving the environment and surrounding ecology. “Minerals deposited in the Ring of Fire are worth between $60 billion and $90 billion according to most estimates. Excluding the additional economic activity generated in extracting those resources, the value of the deposits alone are equal to about 2.75 per cent to 4.25 per cent of GDP - creating a meaningful source of potential growth.
“The main logic behind the Chinese investment in Mexico is to circumvent tariffs and approach the US market,” says Matias Gomez Leautaud, the lead analyst for Mexico for political risk consultancy Eurasia Group. “There is an assessment that the IRA will accelerate the development of Mexico’s manufacturing ecosystem and that Chinese investment will be able to benefit.”
Yet, Mexico quietly canceled nine lithium concessions held by Ganfeng Lithium Group Co. in August. And the issue is set to become more relevant ahead of presidential elections in both the U.S. and Mexico next year, notes Eurasia’s Gomez Leautaud. The city’s industrial park space has grown tenfold in the period to more than 40,000 hectares, an economic lifeline that’s poised to push Hungary, with less than 10 million people, to become the fourth-largest producer of batteries globally, after China, the US and Germany, according to BNEF data.
There’s also the question of where to house thousands of foreign workers needed to fill factory jobs, with Hungary’s labour market near full employment. It’s especially controversial given Prime Minister Viktor Orban’s anti-immigrant rhetoric, leaving officials to finesse the government message to cater to the needs of battery companies.
“Prime Minister Viktor Orban’s efforts to position the country between the EU’s EV manufacturers and mostly Asian battery producers helped bring FDI into the country and lift employment in higher value added sectors. For Hungary, as well as its Central European peers, the green transition means their economies will fair better when the next energy shock hits,” says Alexander Isakov, who covers Russia and Central Europe for Bloomberg Economics.
Thailand has allocated 43 billion baht to encourage EV adoption at the consumer level and fund stimulus packages to attract investments. Last year, it became the first in Southeast Asia to offer cash subsidies—up to 150,000 baht—for passenger electric cars. “My Japanese clients have lately teased me that I care more about my new Chinese clients now, and I say that’s not true,” she said. “We’re grateful to Japan for being among the first to invest in ICE in Thailand.”
Mining platinum group metals is crucial to sustain the livelihood of around 175,000 mineworkers—who typically have as many as 10 dependents relying on them. Their fate now hinges on the future of global demand, according to Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union, the largest labour group in platinum.
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