Good morning, and welcome to the Global Situation Report for Friday, 19 January 2024.
- CHINA TO OPEN PORT IN PERU, AVOIDING CHOKEPOINTS: Chinese shipping company COSCO announced they would open and will fully own and operate a port in Chancay, Peru, in November of this year.
- Brazilian food and Peruvian copper, along with other South American goods, will ship out of this Pacific port to China.
- China and Peru intend to make this a regional shipping hub that can avoid the Panama Canal and the Atlantic.
Why It Matters: China has effectively secured a shipping route with an economic ally that will avoid a critical maritime chokepoint and a high concentration of Western naval forces. As a commercial port, it is unlikely to be used as a naval hub. This is also likely to strengthen South American integration and economies as overland routes into Chancay spring up to sell goods in China, and it provides an imperative for all of the countries shipping from there to ensure port security from any hostile entities. All of this is likely to increase Chinese influence in the American hemisphere. – J.V.
Chinese Foreign Minister Wang Yi is scheduled to meet with counterparts in Brazil and Jamaica over the weekend – another sign that China continues to place great interest in South America and the Caribbean. – M.S.
- NATO’S 90K-MAN EXERCISE IN EUROPE: NATO is preparing to launch a 90,000-man European exercise in May. This is reportedly the largest exercise since the Cold War and will be based on an Article V activation.
- The expected troop size has more than doubled since it was first reported in September 2023, when it was supposed to be only 40,000.
- Only 9,000 troops participated in the 2021 iteration, according to the Department of Defense.
- NATO announced all 31 nations would participate. The DoD reported that only “over 20” participated in the 2021 iteration.
Why It Matters: This is a routine exercise that is experiencing non-routine participation. While this points to unity within NATO for a common defense, it starkly contrasts the disunity we saw in Operation Prosperity Guardian. NATO nations are likely taking collective defense in Europe more seriously but also recognizing that they need to ramp up their own defense. Both of those attitudes will contribute to increased defense spending and likely more frequent and larger joint exercises for NATO and other alliances. – J.V.
- CONGO COPPER AND COBALT SCARCITY LOOMS AMID UNREST: Democratic Republic of the Congo (DRC) opposition leaders are calling for mass protests tomorrow as the current president is sworn in for a second term. Both opposition leaders and the national Roman Catholic Bishop have accused the ruling party of mass voter fraud.
- The DRC was the world’s second-largest exporter of refined copper in 2021, the fourth-largest raw copper producer in 2020 (7.6% of global copper), and has been growing copper production each year.
- Seventy percent of the world’s cobalt comes from the DRC, with a single mine accounting for 20% of the world’s cobalt.
Why It Matters: Both minerals are critical to numerous industries. Copper is involved in everything from bullets to wiring. Cobalt is used as an alloy for high-end jet engine parts and battery production. A disruption to either of these minerals could lead to higher prices for end-users and consumers. – J.V.
Goldman Sachs predicted less copper supply through 2030, as production in Peru and Chile, which together account for one-third of global copper production, has been in decline since 2020. – H.B.
THAT’S A WRAP: This does it for today’s edition. Thank you for reading. If you know folks who would also like to receive this email, would you please forward it to them? We appreciate you spreading the word. – M.S.