Today’s briefing:
— Is China’s minerals chokehold breaking?
— Iran warns the Red Sea is next
— New AirbnBunker just dropped
Your Insider’s briefing:
— Is China’s minerals chokehold breaking?
— Iran warns the Red Sea is next
— New AirbnBunker just dropped
Good morning {{first_name | Intriguer}}. I just had a flash-back to one of the last times I was absolutely crying with laughter. I somehow got invited to a dinner high up in the Hollywood Hills and ended up next to one of the minds behind the original Lion King.
I instinctively went to offer my card like a good diplomat but he stopped me mid-reach, cautioning that he and his best pal actually have a competition for who can find literally the worst business card. Like, worst-sounding job, ever.
He went on to share some examples that had me in stitches, but my eyes quickly glazed over with terror as my inner monologue urgently reminded me that I myself hailed from a diplomacy world full of acting deputy assistant secretaries or whatever.
So you can bet I kept smiling while I expertly tucked that card right the heck back in my jacket pocket rather than become joke-fodder for the co-creator of Lion King.
Meanwhile, the IEA just dropped a spicy new report on critical minerals and I promise, much like an acting deputy assistant secretary, it’s way more intriguing than it sounds.
 | Managing Editor Jeremy Dicker |
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Model of the day
Kimi-K3
That’s the name of a new AI model built by China’s Moonshot AI, vaulting ahead of Anthropic’s vaunted Fable 5 to the top of a key global frontend ranking. Speaking at the World Artificial Intelligence Conference in Shanghai, President Xi declared China the global leader of open-source AI, adding “AI development should not be a solo performance”.
Don’t be so critical.
Let’s all please take a moment to enjoy the eyebrows of IEA boss Fatih Birol.
Grab your hard hats, Intriguer. The boffins at the Paris-based International Energy Agency just dropped their latest critical minerals outlook and it’s a doozy, starting with…
⛔ Triple
That's the surge in mineral tariff codes China has slapped with export controls since 2023. And given China's market dominance, it’s turning a seemingly niche risk (play nice or we'll cut you from our dysprosium!) to something much more systemic.
How systemic...?
😧 $6.5 trillion
That's the rest of the world's economic output now at risk — think auto, defence, tech, energy — if China fully implements all those rare earth export controls (largely now on pause until November).
That, dear Intriguer, is what you call leverage, just as US trade talks limp on. Tiny random molecules making the difference between EVs, wind turbines, iPhones, and F35s or... not.
And yet somehow, China isn't the only chokepoint anymore, because...
🚢 Half
That's how much of the world's seaborne sulphur trade would ordinarily pass through Hormuz if it wasn’t now grinding back towards a halt amid the renewed US-Iran war.
Who cares about an element that smells like fart, you ask? You could've picked a less crude way to ask, but sulphur is the base feedstock for sulphuric acid, which is essential for leaching critical minerals (copper, nickel, some lithium) for the energy transition.
Acid costs have already spiked from (say) 3% of lithium cash costs to over 11% by May. Apparently an oil-war in the Gulf doesn't care about our net-zero targets.
And yet while acid gets more pricy upstream, something downstream in China now costs...
🆓 Zero
That's been China's record low benchmark copper smelter fees lately. Spot fees have been negative, paying to smelt your copper! Why? China’s subsidies helped build 90% of the world's new smelting capacity since 2005, totalling half the global capacity today.
But the result is these smelters are now so starved for raw materials they actually bid against each other to get the inputs they need just to keep their facilities running. Good if you're Chile, left keeping the entire value of your copper.
But for everyone else? That means half our copper supply rests on a subsidised machine that can go from free to gone with the flick of a switch in Beijing.
So the world's investors are rushing to break these bottlenecks, right? Right…?
📉 9%
That's how much critical minerals investment actually declined last year. Even exploration spending dropped 10%. What's going on? It depends a bit on the mineral: copper investments still grew (we still can't really electrify without it), while various battery metals crashed (partly due to rapid shifts in chemistry).
But it's also a result of all the price volatility and international intrigue (💅) — how do you drop a few billion on a new processing plant when your prices can go to the moon or the basement based on Xi Jinping's mood that evening? You don't, unless you're...
🏛️ Quadruple
That's the explosive growth in Western government financing commitments for mineral projects since 2023, filling the gaps left by spooked investors. Maybe more importantly, capitals are also committing to price floors — ie, don't worry about Beijing crashing those prices, just keep building and refining because we promise to keep buying.
And you know what? It's working. The report notes new refining projects and ramp-ups (like Australia's Lynas in Malaysia) have chipped China's rare earth refining dominance from 90% down to... okay, still 85%. But if all the other pledges and announcements actually become reality? It might drop further to… okay, still 70% by 2035.
So there you have it, dear Intriguer. The race to decouple is officially underway, but that finish line? Ufff, it's still decades and a few trillion away.
Intrigue’s Take
We’re hurtling towards a…
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Meanwhile, elsewhere…
🇮🇷 IRAN — Escalation.
Hours after President Trump thanked Iran for releasing a US citizen as a goodwill gesture, US forces conducted their sixth straight night of strikes, this time hitting key bridges and rail-lines. Iran has now called for Yemen’s Houthis to close the critical Red Sea chokepoint (typically 12-15% of global maritime trade) if the US starts hitting energy infrastructure. (BBC)
Comment: The US continues to assure stranded tankers that the southern Hormuz route is still open, though against that chaotic backdrop above, it’s any wonder a tanker apparently responded over the radio with, “f—k off”.
🇳🇮 NICARAGUA — Burning bridges.
Nicaragua has severed ties with Italy after Rome kept pressing for the extradition of Alessio Casimirri, a member of the Marxist-Leninist Red Brigades wanted for the 1978 kidnapping and murder of one of Italy’s earlier prime ministers. (Reuters)
Comment: It hardly seems smart for Nicaragua’s Cuba-aligned Ortega dictatorship to be playing tough with the free world in defence of a character like Casimirri, literally the same day DC was hosting a world summit focused on leftist terrorism…
🇰🇷 SOUTH KOREA — So long, no rise.
Seoul’s Kospi stock index has dipped after Korea’s central bank raised rates for the first time in three years, as the country’s historic chip boom nudges inflation. (CNBC)
Comment: To give you a sense of scale here, the average bonus Samsung is paying its chipmaking division is $340k!
🇫🇷 FRANCE — Wildfires rage.
Fuelled by back-to-back heatwaves, drought, and winds, wildfires have now burned over 41,000 hectares of land in France so far this year, four times the average. (FT $)
🇲🇲 MYANMAR — Sea tragedy feared.
Over 500 members of the Rohingya minority are now feared dead after two ships sank off Myanmar. A million Rohingya have fled Myanmar’s civil war and repression since 2017, many in overcrowded and unseaworthy boats. (Guardian)
🇹🇼 TAIWAN — Regional huddle.
Shortly after revealing a record $22B in Q2 net profit (!), Taiwan’s legendary TSMC chipmaker has announced an additional $100B investment in the US, pushing its total US commitment beyond a quarter trillion dollars. (Taipei Times)
Comment: Taiwan is walking a delicate line here: investing enough to keep Trump 2.0 onside, but without transferring enough chip-magic for DC to one day walk away.
🇪🇬 EGYPT — Turkey’s middleman.
Egypt’s defence minister has wrapped his visit to Ankara with a new bilateral pledge to further build on their $350M deal for a joint new arms manufacturer, aimed at exporting weapons systems across Africa and the Middle East. (BIA)
Comment: Turkey has been on a hot streak lately, signing deals to supply several African countries and fill a gap left by Europe and Russia. But what does Egypt bring? Its military-complex has deep pockets, established facilities, and a lower cost-base.
🇺🇦 UKRAINE — Shake-up backlash.
Amid continued protests over his dismissal, the popular, young, and tech-savvy defence minister (Fedorov) has used his last press conference to suggest it was a reformist clash with Ukraine’s top commander (Syrskyi) that cost him the job. Meanwhile, Zelensky’s new PM (Koretskyi) is an entrepreneur with a reputation for helping revive struggling state enterprises. He takes office just as Putin’s missile attacks made June the deadliest month for Ukraine’s civilians since April 2022. (AP)
Comment: For all Zelensky’s strengths as a wartime leader, this Fedorov ouster is shaping up as another example of his struggle to manage politics on the home front. Meanwhile, in more hopeful news, a bipartisan Russia sanctions bill championed by the late Lindsey Graham now apparently has 60+ co-sponsors in the US senate, with momentum in both chambers plus even reports of White House support.
Extra Intrigue
Some intriguing currency movements over the past six months…
The 🇮🇳 Indian rupee has lost 6% of its value against the USD due in part to high oil prices (India imports 90% of its crude).
The 🇵🇭 Philippine peso has slid 3.5% against the greenback amid those same high oil prices plus higher interest rates in the US.
The 🇬🇧 British pound has appreciated nearly 1% against the USD as markets temper their expectations for an incoming Fed hike.
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Bunker of the day
Credits: BBC / Giancarlo Gininni.
What do you do with a defunct ol’ Cold War nuclear bomb shelter in rural Ontario? You flip it into luxury doomsday condos for the rich and paranoid, of course.
Welcome to The Diefenbunker’s Fallout Complex: for the low low price of… actually we don’t know because fittingly, prices are being kept secret. But welcome anyway, and enjoy sheltering from absolute cataclysmic events above-ground, whiling away your time with fine dining, a spa, yoga studio, and even a cigar lounge. In the unlikely event zombies break in (how would they know the security codes?), just flee on your private jet airstrip.
The best bit? Until those nukes and pathogens actually start flying again, just rent your luxury bunker out as a hotel room to help cushion the painful (if secret) fiscal blow.
Friday quiz
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