Hunter Biden launched a clean tech company in 2012, and it helped secure a lucrative cobalt contract for Beijing’s state-owned energy conglomerate, China Metallurgical Group Corporation (MCC).
While Donald Trump’s tariffs on Chinese steel and aluminium tariffs have sparked fears of a Chinese response, the Trump administration took two steps this week to ease some tension between the two countries. This week, Trump backed off a planned escalation on tariffs on Chinese goods worth $200bn. And while the Trump administration insisted that China still needed to make more concessions on trade, Beijing softened its response, asserting that a dialogue was underway.
What happens when you can’t make a deal? China’s state-owned energy conglomerate Metallurgical Group Corporation gives in to hardball tactics and an ultimatum. The conglomerate, which boasts about its long-term client relationships and is heavily involved in steel, aluminium, and other commodities such as coal, threatened to get tough with US suppliers in the last few weeks and threatened to cut ties. Beijing warned that it would stop the United States from buying copper in 60 days if its on-again, off-again trade talks were to fail.
The threat had been looming for months and, once Trump threatened to impose heavy tariffs on aluminium and steel, the MCC took it as an ultimatum. And that day came: Beijing took out a $347m loan from MCC’s overseas arm to buy 10,000 tonnes of cobalt from cobalt mine Teck Resources.
There was no immediate comment from Teck Resources, but it was soon joined by SilverBirch Renewables, an Australian company that is a co-owner of the southern Orion cobalt project in Canada’s Yukon Territory, which produces cobalt from Canada’s first large deposit of the industrial metal.
China is the world’s biggest consumer of cobalt, which is used for rechargeable batteries. Cobalt prices have surged this year, outpacing the price of other metals such as nickel and chromium, as Chinese companies ramp up their battery production. This has been exacerbated by the cobalt mine strikes, as copper and nickel production has been impacted because of labour unrest and soaring costs.
An executive at a US battery company said that the MCC was “trying to suck the commodity out of the market, and to do that it is to put very high demand for cobalt within the bounds of its own behaviour”.