‘The country that bombed you is your friend…

The one that built your new railway is your enemy’

This is the Western media’s bizarre messaging to the people of Laos. The nation that was carpet-bombed by America, and which is now being vilified for accepting a new $9 billion railway line paid for by China.

Tom Fowdy

is a British writer and analyst of politics and international relations with a primary focus on East Asia.

Thursday was National Day in Laos. A celebration marking 46 years since the landlocked Southeast Asian nation deposed its monarchy and became a revolutionary communist state. An effort which was supported by Vietnam.

This year, the anniversary had added significance, as it saw the opening of a major new project. It is an electrified high-speed and freight railway system connecting the capital city, Vientiane with its northern neighbour, China. 

The $9 billion project is part of the Belt and Road Initiative, and has been hailed as one of its flagship achievements. It is the first commercial and industrial railway in Laos, which, given its geography and the fact it is surrounded by mountainous terrain, has not previously had many options to expand its exports and generate economic growth.

Now, though, it has a direct rapid link into the world’s second largest economy and the world’s largest consumer market by population, and a connection to the booming ports of Guangdong. In terms of what it will bring to Laos, it is a game changer. So, what’s not to like about it?

To nobody’s surprise, the mainstream media have responded to the railway with the usual anti-China negativity. A plethora of articles sought to paint the project as a ‘debt trap’. Promoting the accusation that Beijing loans countries money for projects they cannot afford and then exerts political leverage over it. 

”China, but at what cost?”

The Financial Times, for one, ran with a cynical article headlined ‘Laos to open Chinese-built railway amid fears of Beijing’s influence’. It implied that somehow Laos feels threatened or fears the construction of this very pioneering railway project. This suggestion of ‘fears of Chinese influence’ has become a common feature on such stories. It seek to cast doubt over anything positive China may be achieving or doing. 

A common Twitter meme among pro-China users which has followed from stories like this asks: “but at what cost?” highlighting the frequency of such negative coverage.

And if you Google “China, but at what cost?” you can find a great many examples of articles published in major outlets. In producing such pieces, the broader intention is to depict Beijing’s actions as unwanted, threatening and constantly facing opposition. In the case of the Laos railway project, the ‘problem’ is it was financed by debt, and therefore it is not a positive step.

Yet this argument is as insulting as it is outright insensitive to Laos’ contemporary history. Anyone who knows anything about Laos’ relatively recent past will be well aware that China is not the country to fear, but the United States – the nation that dropped over 260 million cluster bombs on Laos and completely devastated the country as an extension of the Vietnam War, making it the most single bombed nation in history and claiming over 50,000 lives. 

What is the cost of unexploded bombs clearing?

Many of these bombs remain unexploded and litter the countryside of Laos, continuing to kill civilians. In constructing the new railway, workers first had to clear the unexploded ordnance. How is it that the world and the mainstream media remain indifferent to this atrocity? And how, by any stretch of the imagination, can they claim that China is the true threat to Laos, and that the US and its allies act in the true interests of the country?

Herein lies the problem. Such a mindset symbolizes the elitism, chauvinism and self-righteousness of the countries of the West. Countries which are ideologically inclined to believe that they stand for the ‘true interests’ of the ordinary people in the countries they profess to liberate. 

Western politics peddles the assumption that through countries’ adherence to liberal democracy, they exclusively hold a single, universal, impartial, and moralistic truth, derived from the ontological legacy of Christianity, and they must introduce it to others. The West always acts truthfully and in good faith, while its enemies do not. And therefore, so the logic goes, any policy the US or its allies direct towards Laos is motivated by sincere intent and goodwill for its interests. In turn, anything that China does is bad-faith, expansionist and power-hungry behaviour motivated by a desire to influence or control the country. 

This creates the bizarre scenario whereby Beijing is depicted as evil and sinister for building a railway to connect to its neighbour. However, we should forget America dropping millions of bombs on the country because it was done in the name of ‘freedom’. I’m sure you can imagine how the media would react if China did the latter.

Pro US media distorting reality

The Laos-China railway has provided a textbook example of how the media can distort a story in order to fortify an incriminating narrative, while brushing aside brutal realities. We are shown a lopsided world, where the travesty of a country being bombed into oblivion with consequences lasting decades is ignored, and the preference is to try to convince us how that same country’s first commercial railway line is, in fact, what it should really be scared of. 

It is a demonstration of how the power of the English-language, pro-US media distorts reality itself and how they can blow up an issue, yet hide the truth, by professing to care dearly about the wellbeing and interests of a country which the West poured death, destruction, and carnage upon in the name of freedom.

Indonesia mysteriously quiet on China sea incursion

Giant Chinese survey vessel spent over seven weeks in Indonesia’s EEZ but Jakarta has opted to look the other way

When Britain’s Premier Oil entered into a joint venture last year with state-owned Russian oil giant Zarubezhneft to exploit the Tuna natural gas block in the North Natuna Sea, upstream regulator SSK Migas said the deal would strengthen Indonesia’s sovereignty in the area.

Fast forward a year and almost the opposite has happened. Officials struggling to explain why a Chinese survey vessel was allowed to spend seven weeks conducting intensive seabed mapping inside Indonesia’s economic exclusion zone (EEZ) south of the Harbour Energy concession.

The 6,900-tonne Haiyang Dizhi 10 and its Chinese Coast Guard (CCG) escort pulled out of the area on October 22. Only four days before the start of the three-day virtual Association of Southeast Nations (ASEAN) summit.

It has done that before, sailing to the Fiery Cross Reef in the disputed Spratly Islands for replenishment in late September before returning on October 4 to continue its unlawful research.

This time, ship-tracking data shows it heading back to its homeport of Guangzhou. Chinese Coast Guard cutter 6305 remains in the vicinity of the drilling rig. Appraisal operations will continue for at least another month.

Analysts say the survey ship’s extended stay has served as a tacit recognition of China’s vaguely-defined nine-dash line. That intrudes into Indonesia’s EEZ near its confluence with Vietnam’s maritime border.

No protest by Indonesian government so far

The Indonesian government has yet to protest the incursion. Chinese ships were being watched most of the time by up to nine Indonesian Navy and Maritime Security Agency (BAKIMLA) patrol craft. However, with apparent orders not to intervene.

“I think Indonesia is hedging its bets and not doing anything that will lead to increased tensions,” Australian Strategic Policy Institute (ASPI) analyst Malcolm Davis told Asia Times. “If the presumption is that China will be satisfied with that, then Indonesia is in for a big shock. Give the Chinese an inch and they will take a mile.” It is worth saying that ASPI by default pushes anti China opinion.

Bill Hayton, an associate fellow at London’s Chatham House and author of a book on rising tensions in the South China Sea, agrees. “If the Indonesian government has not already sent a protest, then it needs to do so urgently or it will risk creating a precedent and losing its rights,” he was quoted as saying this week.

Diplomats have been unable to determine why the Indonesians have kept quiet. As one put it: “We  share your perceptions and concerns, but some think it may not be the time to anger our ‘northern friends’ given the recent moves in the South China Sea.” 

Although the Indonesian Armed Forces (TNI) have always enjoyed a much closer relationship with the United States, China did join the unsuccessful effort to salvage the Indonesian submarine KRI Nanggala-402, which sank with all 53 hands aboard north of Bali last April.

Chinese companies are very important for Indonesian economy

More importantly, Chinese companies are playing a leading role in Indonesia’s entry into the global supply chain, with its flourishing nickel industry acting as the foundation of a highly-promising lithium battery and electric vehicle industry.

He said the Indonesian government respected freedom of navigation in the North Natuna Sea, adding: “We have discussions with our contact partners in China. We agree to disagree in some areas,. I think we’re able to manage so far.”

“We don’t feel we have issues with China. It’s like brothers and sisters. Sometimes you have problems, but don’t make it into a big problem. I don’t see it as a big deal as long as they don’t claim officially that it belongs to us (China). That’s different.”

Davis and other maritime experts point out that freedom of navigation is not the issue. They note that apart from an incident in 2016, in which a Chinese Coast Guard vessel seized back a captured trawler in Indonesia’s territorial waters, Jakarta has appeared to back off when confronted with more robust pressure.

“This is quite serious,” says Davis, a former Defense Department strategist. “The Indonesians may not want to rock the boat, but at some point, Jakarta is going to have to decide what to do with China. The Chinese are using soft power very successfully.”

In addition to its economic value, the Tuna block has a strategic geopolitical role because it is located close to the border with Vietnam.

Vietnam’s vast wind power potential

A giant wind-farm off the south coast is one of more than 150 wind power projects planned in Vietnam; the 1GW Vinh Phong project will be funded by a Russian-Belgian JV, but Hanoi needs to improve its clunky electricity grid so renewable projects can be fully incorporated in coming years

(AF) A plethora of international players are beating a path to Vietnam to take part in its renewables ramp-up – the largest in Southeast Asia – which includes both solar and onshore wind and now even an offshore wind project development.

The most recent to show interest includes Russian state-owned oil and gas producer Zarubezhneft and Belgian marine contractor DEME Offshore.

The two signed a memorandum of understanding (MoU) to build the proposed Vinh Phong project. It is a 1-gigawatt (GW) offshore wind farm proposal with a cost of $3.2 billion. Vinh Phong is located in southern Vietnam, northeast of Ho Chi Minh City, the country’s business hub.

The two partners look to commission the first phase of the project, with 600-megawatts (MW) worth of capacity, by 2026, prior to a second phase with a further 400MW capacity by 2030. If plans hold tight, it could be Vietnam’s first offshore wind farm and it is anticipated that more will follow.

Zarubezhneft said it will share investment costs with a specially formed investment vehicle called DEME Concessions Wind. Under the MoU, the two firms will get oil and gas producing venture Vietsovpetro and DEME Offshore to manage the construction process.

Vietsovpetro, a joint venture between Zarubezhneft and state-run PetroVietnam, already operates several offshore oil and gas blocks in Vietnam.

Zarubezhneft

Zarubezhneft set a goal of entering both the wind and solar sector in Vietnam, Cuba, Southern Europe and Russia. These plans, not surprisingly, suffered setbacks due to the onset of the Covid-19 pandemic last year and a subsequent pullback in global oil prices amid the worst slump in demand for oil ever, which caused a drop to multi-year lows. However, global oil prices have recovered, with the global oil benchmark, London-traded Brent crude, now hovering above $70 per barrel, with price appreciation and forecasts that demand will increase for the rest of the year.

Vietnam’s clean energy transition

Zarubezhneft’s disclosure comes as Vietnam undergoes systemic changes in its energy sector. This stems from a forecast natural gas supply shortage that will impact its power generation capacity with potential brown and black-outs, mostly earmarked for the more populated south. However, Covid-19 related economic contraction has pushed that forecast back at least a year or two.

Vietnam’s energy quandary also stems from steady economic growth and more energy consumption, as well as geopolitical interference. Over the past several years, China has prevented PetroVietnam and its foreign partners from developing natural gas resources in Vietnam’s own UN-mandated 200 nautical mile exclusive economic zone (EEZ) in the South China Sea, a problem not dissimilar to that faced by the Philippines.

To offset this supply shortage, Hanoi initially focused on developing more liquefied natural gas (LNG) infrastructure. Currently, two LNG import terminals are being constructed in the southern part of the country. With at least six more approved, and possibly more considering projects pending approval at various provincial levels. Vietnam also has as many as 22 LNG-to-Power projects in its soon to be released Power Development Plan 8 (PDP8), to 2030 with guidance to 2045.

Over 150 wind projects proposed

Vietnam has marked advantages in its renewables ambitions over many of its neighbors in the region. It is including a vast coastline of some 3,260 km (2,030 miles), excluding islands. It is ideal for both offshore and near-shore wind-power development. By way of comparison, only around 3% of neighbouring Thailand’s land mass has suitable wind speeds needed to drive turbines, which greatly hinders the country’s capacity to develop wind power.

Vietnam’s solar radiation in most parts of the country is also ideal for solar project development. And it has contributed to its quick build-out, which seems to have peaked last year.

Much of the country’s recent success with solar can also be attributed to Hanoi approving generous feed-in-tariffs (FIT). These tariffs encourage investment in renewable energy by guaranteeing an above-market price for producers. Since they usually involve long-term contracts, FITs help mitigate the risks inherent in renewable energy production.

Tax exemptions to reduce investment risks

The government has also approved FITs for its wind-power development, with those tariffs up for review at the end of October. It also offers various tax exemptions to reduce investment risks.

Yet, Vietnam’s wind power development pales in comparison to its solar build-out. By the end of 2020, wind power accounted for just 1% (670MW) of the country’s energy mix. It is compared to 16.6GW for solar, including rooftop solar, according to the US Energy Information Administration (EIA). Under PDP8, the next power development plan, the country aims to ramp-up solar capacity to 18.6GW and wind capacity to 18GW by 2030. Vinh Phong, for its part, is one of as many as 157 wind farm projects proposed in Vietnam.

Three weeks ago, the Asian Development Bank (ADB) signed a $116-million loan with three Vietnamese firms to finance the construction and operation of three 48MW wind farms, totaling 144MW, in the central province of Quang Tri.

The projects will increase Vietnam’s wind-power capacity by as much as 30%, helping it to also offset the country’s still troubling reliance on coal needed for power generation. Coal still makes nearly 40% of the country’s energy mix, and that figure looks likely to remain steady until to at least the middle of the next decade.

The ADB’s move three weeks ago was its first wind-power project in Vietnam and comes just a month after the bank said it would stop funding most fossil fuel projects in the region, even natural gas, under most scenarios.

Electricity grid needs urgent improvements

However, as promising as Vietnam’s renewables build-out is, several problems remain, including power grid curtailment. Simply put, the country needs new transmission and distribution infrastructure to accommodate additional capacity and transmit the new power to where it’s needed.

The problem is already being felt by a number of power projects that have had to curtail production since transmission lines are already operating at capacity. Especially in areas where there is a concentration of solar power. This has resulted in less electricity being produced, less revenue earned and an inability of some project backers to service debts incurred to build projects.

Similar problems – depending on each location’s specific grid development – could see otherwise bankable wind power projects, (onshore, near-shore and offshore) unable to obtain necessary funding to go forward.

But the Vietnamese government is now starting to address this problem. It recently  adopted a new law that improves and prioritizes grid development. And grid development is now a priority in the draft PDP8, the first time it’s been included in the country’s PDP.

However, expanding grid capacity is both capital and time intensive. Build-out times can range to as much as five years or more. Other countries are also confronting similar situations when building renewable power projects, including heavyweights such as Germany and the UK.

There are some short-term solutions for grid congestion, however, such as utility scale battery storage, grid enhancing techniques, plus topology optimization software. All of these improve grid resilience and reliability, and prevent bottlenecks, but the long-term solution is still expanding Vietnam’s transmission grid.

Singapore’s foray into space

Boldly going where no little red dot has gone before – Singapore space industry


By Derrick A Paulo, Lee Li Ying and Sharifah Fadhilah Alshahab

The efforts of the country’s budding space industry are giving the Republic a larger stake in the space race than many people may think. The programme Why It Matters looks at the opportunities and obstacles.

The first made-in-Singapore commercial earth observation satellite was launched in December 2015. A global network of satellites may be on the horizon

Over the past four years, Singapore-based start-up Transcelestial has made a device called Centauri. It is about the size of a shoe box. Its aim: To provide internet connectivity that is around 1,000 times faster, or more, than now.

It just needs to connect to a satellite using laser communications. No, make that a global satellite network the company wants to put into space.

Working from home at the speed of light, however, “isn’t even scratching the surface of the capability” of laser-linked satellites, says Transcelestial co-founder Rohit Jha.

He is looking into connecting “roughly three and a half billion people” — about half the world who have no internet connectivity or have “very basic 2G-level phone services”.

“All you have to do is position a satellite above (them), and drop a laser link. And you can power high-bandwidth internet to everyone,” he tells the programme Why It Matters.

Expecting a roll-out by the end of 2024

Transcelestial is still doing research and development for its global space network, and eyeing a roll-out by the end of 2024.

The start-up is not alone in aiming high. There are more than 30 firms and over 1,000 people in Singapore’s budding space industry.

And the effort they are putting into space technology is giving the nation a larger stake in the space race than many people may think.

Since 2004, investors have put US$135 billion (S$183 billion) into the global space sector. Singapore, though a little red dot, accounts for 7 per cent of the global share.

By 2040, the global space industry could generate revenue of US$1.1 trillion, according to Morgan Stanley estimates. It is a race for big money, even as Singapore’s foray into space could help to solve world problems too.

‘LOW-HANGING FRUIT’

For space superpowers and private companies with deep pockets, going into space also means attempting missions to the Moon and beyond.

But that is not the kind of breakthrough that Singapore Space and Technology Association president Jonathan Hung thinks the Republic needs.

Size is a consideration here — the Kennedy Space Centre, where such missions blast off in the United States, occupies a site that is 80 per cent of Singapore’s land area.

“We’ve got to pick and choose what we want to do. Right now, Singapore’s play is very much within the satellite domain. Now, satellites can do quite a lot. Specifically, we cover telecommunications. We also cover advanced navigation,” says Hung.

These are some of the “low-hanging fruit” he believes should not be underestimated. “There are good jobs. We can create … advanced manufacturing activities. All these things will help regenerate and spur the economy on.”

Jonathan Hung has been wooing government players, research foundations and international partners for the past 14 years to make Singapore a bona fide space hub

There are now more than 2500 satellites orbiting the earth – there will be more

Without satellites providing location tracking, smartphone apps that people take for granted, like ride-hailing services and Google Maps, would stop working. There are now more than 2,500 satellites orbiting the earth, and experts say there will be more.

These go as far as 35,000 kilometres away. It is the orbital altitude of geosynchronous satellites transmitting television and other signals to the ground. There are also satellites orbiting at lower levels.

Transcelestial, for example, plans to put its satellites at around 1,000 km above ground. It is a reason its signals would be faster — taking “less than five milliseconds” instead of a delay of “almost a second”, says Jha.

Another benefit of its satellite technology, especially to a city like Singapore, could be the cheaper and thus faster roll-out of 5G.

“If you’re building fibre networks, a kilometer of fibre is roughly around US$100,000 to US$150,000 … Our device usually comes in at one-tenth of that price,” cites Jha.

EYE IN THE SKY

Satellite products and services are driving more than half of space-related commercial activities worldwide. In Singapore, the first commercial remote sensing satellite built here — called TeLEOS-1 — was launched in 2015 by Singapore Technologies (ST) Electronics.

The satellite gave the Republic an eye in the sky to see what was going in the region, with geospatial analysts studying its pictures to provide insights for organisations willing to pay for them.

There are just two problems with TeLEOS-1. It cannot see through clouds, and is blind at night.

So engineers are putting together something with a more powerful vision. TeLEOS-2, which is now undergoing testing. It will carry radar that can capture images day or night, and no matter what the weather condition.

But it may be a couple of years before the satellite is launched.

A team of 70 engineers took five years to develop TeLEOS-1, considering the space environment a satellite must operate in “compared to our everyday electronics”, as systems engineer Tan Chek Wu puts it.

For example, it alternates between heat and cold “14 to 15 times a day” in orbit, cites Tan, who is with ST Engineering’s satellite systems. It also travels at “more than 7 km per second” — even airplane speeds do not come close.

And to ensure that a satellite can “survive the vibrations of the journey” on a rocket launched into space, his team must “put it on a big shaker” first.

NANOSATELLITES AND 18-METRE ROCKETS

While the TeLEOS-1 is a 400-kg satellite, former defence engineer Ng Zhen Ning thinks the start-up he co-founded in 2017, NuSpace, has a winning edge with satellites weighing less than 10 kg.

These nanosatellites can do almost anything conventional satellites can, like monitoring weather conditions or tracking internet data.

“It’s all thanks to miniaturisation of technology,” says Ng, citing the mobile phone as an example. “That has shrunk to the size of an iPhone. The same thing has happened for nanosatellites.”

There may be a vast expanse of space, but budgets are limited. “Building such satellites is roughly 50 times cheaper,” points out the 30-year-old, who expects the cost to go down further, together with the mass manufacturing of satellites.

“We’re working with contract manufacturers to figure out how we can streamline the entire assembly process. And hopefully by 2024, we should be able to have this assembly line here in Singapore.”

NuSpace’s satellites each weigh up to 4.5 kg

Small satellites have some downsides, however. Big satellites get priority on rockets because they take up most of the space. So if their production schedules are delayed, then everyone else must wait.

Smaller spacecraft for small satellites?

Rocket makers are now coming up with smaller spacecraft so small satellites can have a dedicated ride to space. In Singapore, 29-year-old Simon Gwozdz is looking into this, starting with a research rocket as a prototype for something more powerful.

His dream rocket would be 18 metres high, or six storeys. This would still be six times smaller than some of the largest rockets ever made, as high as 110 metres.

His grander plan, however, is to launch rockets from locations nearer to Singapore.

“Being close to the equator is very, very helpful in launching a rocket. It can go into any kind of orbit. (It) means you can get into any kind of market niche,” says the founder of Equatorial Space Systems.

Compared with the polar regions, an equatorial launch would also save fuel, as the surface at the equator moves faster, giving a rocket an extra push.

“We don’t have much land in Singapore … but there’s a lot of sea. And sea launching has also been done for a number of years,” notes Gwozdz.

“All you have to do is take a barge, retrofit it a little bit, install some extra equipment, and you can use it.”

The ideal location to him would be the Indian Ocean, “because we won’t be overflying anybody’s territory”. He is also looking at the South China Sea, “not very far from the coastline of Johor”.

“We’re currently exploring the possibility of conducting launch operations from that site,” he says, while noting that co-ordination with Malaysia and also Indonesia is “absolutely necessary” in any rocket launch.

Space is becoming a ground for doing business

He thinks it is worth investing in sending a rocket to space, because “in 20 years’ time, a country with no sovereign launch capability will be … like a country that doesn’t have its own airline”.

“Why should we invest in pretty (much) anything, in Changi Airport in the first place?” he adds. “Space is becoming a ground for doing business, on top of the exploration of more lofty ideas of course.”


This article was originally published by

Tsingshan plans nickel smelter in Indonesia powered by renewables

World’s top nickel and stainless steel maker plans to build solar and wind facilities to power a 2,000MW smelter in eastern Indonesia within the next three to five years

by Tim Daiss

Chinese steel and nickel producer Tsingshan Holding Group, the world’s top nickel and stainless steel maker, plans to build a 2,000-megawatt ‘clean-energy’ facility in Indonesia within the next three to five years, while laying the groundwork for further green development, the Wenzhou-based company said last week.

It will build solar and wind power stations needed for the plant. As well as supporting facilities at its Tsingshan and Weda Bay industrial parks in Indonesia.

The plant will supply power for the company’s production of raw materials used in batteries for electric vehicles (EVs). Tsingshan wants its battery-materials operations to have net-zero carbon emissions. It already holds investments in Indonesia for battery-grade nickel chemicals production. It has been trying to expand its footprint in the new energy sector.

Earlier this year, the firm unveiled plans to make battery-grade nickel from material reserved for stainless steel. However, that process usually uses smelters that consume large amounts of coal for power generation. It is making Tuesday’s announcement even more important.

Tsingshan also announced plans to supply nickel matte. It is a main feedstock to produce nickel sulphate, to domestic cobalt smelter Huayou Cobalt and new energy materials producer CNGR. Last July, the group started trial nickel matte production with more than 75% content of the metal to meet increasing EV battery demand.

Chinese firms like Tsingshan have been stepping up their focus on EVs in China, the world’s largest car market, as Beijing promotes greener vehicles to help reduce high air pollution levels, particularly in its major urban centres.

EV MANUFACTURERS’ CATCH-22

EV car manufacturers, however, have been caught in a seemingly Catch-22 situation over its need for nickel. On the one hand, they need more nickel production for EV batteries. They also need to address the carbon footprint coming from production of the metal. 

Tesla Motors founder Elon Musk last July pressed miners to produce more nickel. The cost of batteries remained a large hurdle for the company’s growth. However, he is also pushing for cleaner nickel production at the same time. A call that some in the industry say may still be hard to come by.

“Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way,” Musk said on a post-earnings call at the time. Tesla needs more nickel supply to support not only its increased auto manufacturing numbers. They also need it for larger vehicles and trucks.

While some analysts say that nickel is still in abundant supply, others claim supply could be stretched by the end of the decade. Nickel demand is expected to increase from 2.2 million metric tons to somewhere in the range of 3.5 million to 4 million metric tons by 2030.

“The current challenge is to nearly double supply while meeting environmental, social, and corporate governance (ESG) requirements.”

Nickel is crucial for EV battery efficiency. It makes batteries energy dense so cars can run further on just a single charge. It’s now widely viewed to be the second most expensive component of EV batteries. EVs, for their part, will comprise 58% of global passenger car sales in 2040. Compared with 10% by 2025, according to a Bloomberg NEF report.

SE ASIA TOPS NICKEL PRODUCTION

Indonesia passed the Philippines in 2018 to become the world’s largest nickel producer and could soon pass Canada and Australia combined. 

Indonesia had 13 operating nickel smelters with an input capacity of 24.52Mt by the start of 2020. And another 22 nickel mines are under development, government data shows, while Jakarta is trying to boost the sector. Indonesia holds about a quarter of all global nickel reserves. 

Meanwhile, several junior miners, such as Vancouver-based Giga Metals Corp and Canada Nickel Co are also planning to produce more environmentally friendly nickel. However, that may still not be enough ‘clean’ producers of nickel for EV makers in the long-term.

Indonesia to arm up with Rafale, F-15 fighter jets

Jakarta backs away from previous plan to buy Russian Su-35 air defense fighters under threat of US sanctions

By JOHN MCBETH

After a series of pandemic-defying trips across the world, Indonesian Defense Minister Prabowo Subianto appears to have settled on the French-made Rafale and an under-strength squadron of American F-15EX jet fighters to bolster Indonesia’s front-line air defenses, with deliveries expected over the next three years.

Along with the 36 Dassault Rafales and eight Boeing F-15s, the wish list also extends to three Lockheed Martin C-130J Super Hercules transport aircraft, three Airbus A330 tankers for aerial refuelling, six MQ-1 Predator drones and Italy’s Leonardo early-warning radar system. 

It could be Jakarta’s biggest-ever defense purchase if it goes through in its current form, but serious questions remain over whether debt-burdened Indonesia can afford the estimated $11 billion it will cost for the aircraft alone and the early availability of the F-15 variant, only two of which have been built so far.

Indonesia’s defense budget for 2021 stands at US$9.2 billion, an increase over the 2020 allocation that started out at $9.3 billion and dropped to $8.7 billion because of fiscal pressure from the pandemic. The 2021 spending includes $3 billion for military modernization.

Widodo’s first-term government had hoped to increase the defense budget to $20 billion by 2019, or 1.5% of gross domestic product (GDP), but that was predicated on 7% growth, not the average 5% the country has achieved over the last five years as it struggled to attract foreign investment.    

What the February 17 announcement does seem to have settled is that Indonesia has decided not to risk US sanctions with the $1.1 billion deal to buy a further 11 Sukhoi Su-35 air defense fighters to go with the 16 twin-engine Su-27 and Su-30 Russian jets it already has.

Then-US president Donald Trump signed off on the Countering America’s Adversaries Through Sanctions Act (CAATSA) in mid-2017, three years after the Barack Obama administration introduced the legislation to punish Russia for its invasion and annexation of Crimea from Ukraine.

If the deal is finalized, Indonesia will become the first East Asian country to operate the Rafale, a twin-engine, delta-winged multi-role aircraft introduced in 2001 and currently in service with the French air force and navy, Egypt, Qatar and, most recently, India. 

India paid $9.4 billion for its 36 aircraft, which began arriving last July amid tensions between India and China over the contested Ladakh region in the western Himalayas. New Delhi also wants to purchase 21 MiG-29s and 12 Su-30MKI fighters.

Washington has yet to respond to India’s request for a waiver from CAATSA for the aircraft, but senior Pentagon officials have made it clear that sanctions would be applied if New Delhi goes ahead with a plan to buy Russia’s self-propelled S-400 missile system in a deal worth $5.5 billion.

The Rafales will add a third logistical tail to the Indonesian Air Force, which apart from its fleet of Sukhoi fighters also has three squadrons of refurbished Lockheed F-16s, recently deployed on patrols over the southern reaches of the South China Sea where Chinese Coast Guard vessels have conducted past intrusions.

Concerns have mounted since China passed legislation authorizing its Coast Guard to use weapons against foreign ships that are considered to be intruding into its waters, a move that could also be aimed at enforcing its unlawful maritime claims inside Indonesia’s economic exclusion zone (EEZ) north of the Natuna islands.

Prabowo had previously shown interest in buying 15 second-hand Eurofighter Typhoon fighters offered by the Austrian Air Force, but despite the favorable price he has always said privately that he wants new-generation aircraft that will stand the test of time.

The 4.5 generation Rafale always appeared to be on his radar, however, due in small part to his affinity for France. A French speaker, the retired special forces general spent his early years in Europe, where family members once came across him standing in front of the mirror pretending to be president Charles de Gaulle.

The history of the proposed sale appears to go back to 2017 when the two countries signed a letter of intent to increase defense cooperation, but it was Prabowo’s two meetings with French Defence Minister Florence Parly, last October and in January, that appeared to lay the groundwork for the deal.

Armed with a range of air-to-air and air-ground missiles and advanced French-developed avionics, the 4.5 generation Rafale has a maximum speed of 2,200 kilometers an hour and a combat range of 1,850 kilometers. It can be used in air superiority, interdiction, ground attack or anti-ship roles.  

Prabowo had initially hoped to also acquire Lockheed’s stealthy F-35 Joint Strike Fighter, but was persuaded to accept the latest version of the F-15, which only now is entering service with the US Air Force to fill a gap left by cuts in the F-22 Raptor program.

Then US defence secretary Mark Esper reportedly told Prabowo on a visit to Washington last October that Indonesia would have to wait at least a decade for the delivery of the F-35s because of a long waiting list of buyers, including  Japan, South Korea and Singapore as the only Asian customers.

While it is the first time the US has sold the F-15 in 20 years, Saudi Arabia and Qatar have continued to fund upgrades worth $5 billion over the intervening years to a point where the EX variant is very different from its predecessors.

Military experts point to its more powerful twin engines, updated cockpit systems and sensors, data fusion capabilities and an ability to carry 29,500 pounds of ordnance over 2,200 kilometers as examples of the improvements to the purpose-built air superiority fighter.

They also note that the F-35 is far more expensive to operate and more problematic to repair compared with the F-15EX, which has a reputed 20,000-hour lifespan and, according to some sources, may cost half as much as the F-35 to operate.

That would present a major challenge to Indonesia. It already has difficulties maintaining the army’s eight sophisticated AH-64 Apache attack helicopters, which have been barely visible since they were delivered nearly three years ago.

Claims by Indonesian officials that six of the new F-15s will be ready for delivery in 2022 appear to be overly ambitious when the US Air Force and Air National Guard will get priority in replacing up to 144 aging F-15C/Ds that are reaching the end of their service years.

Each jet has a fly away price of $87.7 million, but the avionics and weapons systems are expected to add as much as $40 million to its overall cost. The experts also note that some of America’s cutting-edge technology is banned for export to countries like Indonesia.

The acquisition of the mobile Leonardo interdiction radar system will help to bolster Indonesia’s air defenses and, if positioned at a high elevation on frontier islands like Natuna Besar and Sebatik, could conceivably cover more than 500 kilometers of both air and sea, far beyond its EEZ.  

Known as unmanned aerial combat vehicles (UACVs), the Predators are a surprise addition to the shopping list, but Indonesia has been operating unarmed Chinese, Israeli and French-made surveillance drones for three years.

Indonesia’s Agency for the Assessment and Application of Technology is also developing the country’s first armed Black Eagle drone, which will carry a home-built 2.75 folding fin aerial rocket already used by attack helicopters and jet fighters.

Deployed extensively across Afghanistan, Pakistan and the Middle East, the Predator’s precision-guided Hellfire missiles have killed thousands of Al Qaeda and Islamic State militants since they were introduced in the wake of the 9/11 attacks.

The US Air Force replaced it with the heavier, more capable MQ-9 Reaper in 2018, but it remains in service with the Italian, Turkish and Moroccan air forces and would probably be based at Pontianak, West Kalimantan, the main drone base on the edge of the South China Sea.

Race is on for Indonesia’s untapped rare earths

Tin mining tailings could contain commercial quantities of rare earths both US and China would be keen to tap

By JOHN MCBETH

JAKARTA – Rare earth, the experts like to say, is neither rare nor is it earth. But given its use in everything from smartphones to high-tech aerospace and defense systems, a potential buried treasure from the past may soon become the next big thing in Indonesian mining.

Indonesia appears to have only modest proven amounts of the v valuable minerals, but much of what it does have is locked away in the rock waste, or tailings, left over from centuries of tin mining on the islands of Bangka and Belitung, south of Singapore.

Although preliminary studies show state-owned PT Tambang Timah’s tin sands contain 13 of the 17 chemical elements in the periodic table present in rare earths, it will take further investigation to determine whether it is present in commercial quantities.

If it is, that would make Indonesia a player in an industry that is fast becoming a new trade war flashpoint between the United States and China because of its strategic significance for numerous civilian and military technologies, including both laser and precision-guided missiles.

China currently controls 80% of the world’s trade in rare earths and could conceivably  block US access in retaliation for any future Washington sanctions on Chinese-made goods.  

With proven reserves of 327,500 tons, Timah still produces about 30,000 tons of tin a year from an offshore-onshore concession covering 512,369 hectares; other private firms add 40,000 tons, making Indonesia the world’s largest tin producer. 

Rare earths also occur in Aceh, Jambi and Riau’s Singkep Island and in West Kalimantan, where they are associated with rich deposits of bauxite, the feedstock for a US$695 million alumina smelter the Chinese are building north of Pontianak, the province capital.

Historically, most rare earths have been produced as by-products from tin, copper and gold mining, but were not considered worth processing and have invariably ended up in stockpiles, as is the case with Tambang Timah.   

With the US distracted by internal problems, the only outside interest so far in Indonesia’s potential has inevitably come from China, which has 55 million tonnes of rare earth reserves, by far the largest in the world.

But in looking for investors elsewhere, such as the US and Australia, the government is anxious to develop domestic expertise in the complex seven-stage process of refining monazite and xenotime, the two minerals that house REE elements.

Where the US may have an edge over China is in handling radioactive thorium, which is released in the course of the processing and must be treated with extreme care, even if it doesn’t produce uranium’s dangerous gamma rays. 

Laboratory results indicate Timah’s tailings contain significant quantities of neodymium and praseodymium, which in combination with iron and boron are used to produce high-power magnets for electric motors and military guidance and control systems.

Indonesia already possesses 80% of the mineralsrare earths included, needed to manufacture lithium batteries, part of the government’s policy of venturing into electric vehicles as a way of creating a future industrial base built around its vast natural resources.

Neodymium is responsible for most rare earth demand, with a market value of $11.3 billion in 2017. Demand is currently outstripping supply by about 2-3,000 tons a year, but that gap will widen as more lithium battery-powered electric vehicles appear on the world’s roads.

Future prospects depend on the government enacting policy and regulation and in initiating incentives for downstream and upstream industry, according to Fadli Rahman, co-author of a 2014 Colorado School of Mines paper on Indonesia’s rare earth potential.

“If the Indonesian government remains passive and unassertive to the viable options, the rare earths will merely remain rare to Indonesians for the foreseeable future,” said Rahman, now state oil company Pertamina’s youngest commissioner.

With estimated reserves of only 13 million tons, the US is waking up to the fact that China’s domination of the increasingly strategic material leaves it vulnerable.

At one point, neodymium was even on the Donald Trump administration’s list of tariffs it placed on Chinese imports in 2018 before it was quietly removed, an indication of how important it has become to the US economy.

Last year, China threatened to strengthen controls on rare earth exports to the US, one of the reasons why Washington recently formalized an existing partnership with Australia to develop new sources of critical minerals, including rare earth, cobalt and tungsten.

Australia, with 2.1 million tons, is one of a handful of countries possessing significant rare earth reserves. Others include Brazil (22 million tons), Russia (19 million), Vietnam (11 million) and India (3.1 million).

Vietnam, whose rare earth concentrations are along its northwestern border with China and the South China Sea coast, is reportedly keen on using two relatively common elements, cerium and lanthanum, to develop a clean energy capacity.  

The US began mining rare earth at southern California’s Mountain Pass mine in the 1960s, but since 2010 China has become the dominant player, producing 100,000 tons a year compared with the US output of 43,000 tons over the past two decades. 

An open-pit mine close to the Nevada border known as Mountain Pass was recently saved from a second bankruptcy by MP Materials, a company owned by a Chicago hedge fund. It remains the only rare earth mining and processing facility in the US. 

Most rare earth projects have proven to be uneconomic because of mining costs which can contribute 25-39% of the total expenditure for extracting from hard rock deposits. But Bangka-Belitung’s Monazite has the advantage of being in sand form and therefore does not require crushing and grinding.

In the end, thorium and how to deal with it remains a major impediment to the development of monazite deposits.

Indonesian nuclear advocate Bob Effendi, the local representative for American nuclear reactor design company ThorCon, asserts that safety concerns around the stockpiling of the radioactive waste is a “non-issue.”

But local geologists say it will need to be contained in stainless steel casks and stored in reinforced concrete buildings, possibly on a small uninhabited island, until such time as it is needed as fuel for a long-planned nuclear power station.

For decades now, part of the International Atomic Energy Agency’s (IAEA) mission has been to simply monitor the volume of monazite in Tambang Timah’s tailings, as it has done with similar mine waste around the world. 

In the meantime, nuclear power remains on Indonesia’s agenda, initially set down in a 2007 long-term national development planning law that envisaged an operating plant by 2024. 

In 2014, the Ministry of Mines and Energy regulation listed nuclear in the same category as other sources of renewable energy, but with the proviso that it should only be considered as a final option.

A second ministerial regulation in 2019 called for the drawing up of a concrete plan for the construction of a nuclear power station, followed by a presidential regulation earlier this year which listed it as a priority program for advanced studies.

Bangka-Belitung governor Erzaldi Rosman Djohan sent a letter to the Coordinating Ministry of Maritime Resources and Investment on August 3 supporting the construction of the nuclear plant in the southern Sumatran province.

But the Indonesian citizenry may first have to get over their innate fear of nuclear power, which has so far stymied plans going back to the New Order era for a station to be built on the Muria Peninsula in heavily-populated Central Java.

A member of President Joko Widodo’s National Economic and Industry Committee (KEIN), Effendi argues that a thorium-fuelled plant is not only immune to meltdown but is cheaper to build and produces less waste.

The former oilman also challenges the widely-held perception that Indonesia has limitless sources of energy, noting that coal and gas reserves are not finite and claiming that solar and wind potential is only 15% of what it is claimed to be.

Indonesians are not alone in their fear of anything nuclear-related. In Malaysia, the government faces public opposition to the Lynas Corporation’s facility near Kuantan, which processes rare earth oxides shipped from its Mt Weld concentration plant in West Australia.

With more low-level radioactive waste piling up at the plant, and the issue heading for Malaysia’s High Court, Lynas has now been forced to move the cracking and leeching part of the process to the outback mining center of Kalgoorlie-Boulder.