Latin America, Copper, Ethiopia, Climate Change and the Week in Review

Blog / Weekly Review

Latin America, Copper, Ethiopia, Climate Change and the Week in Review

Happy Friday the 13th! We hope the odds are ever in your favor. They certainly were for us this week, as Neil Townsend, the Chief Market Analyst at FarmLink Marketing Solutions, agreed to come on the Perch Perspectives podcast to talk about food prices, bad weather on the Great Plains, and food systems in general. You can listen to the podcast by clicking here, or if you prefer to read a transcript, click here

Now, on to the week in review, our slightly snarky run-down of some of the week’s most important geopolitical events. These are just highlights of some of the many things we are tracking on a daily and weekly basis for our clients and as always we’re happy to share them with you and hope you find them useful. If you ever want to talk more about how geopolitics is affecting you, your business, or your investments, don’t hesitate to drop us a line at or simply reply to this email. Cheers and we hope you are all staying safe and healthy.

Latin America takes center stage. The U.N.’s Economic Commission for Latin America and the Caribbean published its annual review of foreign direct investment into the region. In 2020, FDI fell by almost 35 percent compared with the previous year, led by a whopping 48 percent FDI drop in natural resources. Only five countries saw increases: the Bahamas, Barbados, Ecuador, Paraguay, and Mexico. Initial data on the first five months of 2021 is not good either. Even so, China is now the largest investor in the region and has expanded its appetite from natural resources to telecommunications and digital expansion.

What it means: Latin America has long been on the periphery of global affairs. It might be tempting to look at these FDI figures and conclude that remains the case. We, however, see it differently. After all, distance isn’t what it used to be, and the region is fast becoming a global strategic focal point for great powers. This is a pretty contrarian view these days and is also one of the reasons we started the LatamPolitik newsletter: it’s a subject too many don’t know enough about.

Speaking of Latin America…

Thinking about copper. Workers at Chile’s largest copper mine, Escondida – also the largest copper mine in the world with ~5 percent of global copper supply – reached a tentative agreement with BHP on a new contract. Meanwhile, workers at the Caserones mine stopped working on Tuesday after talks with Minera Lumina Copper, which is controlled by Japan’s JX Nippon Copper, collapsed.

What it means: Since May, we have been writing about how the media has vastly overstated the extent to which Chile’s political stability will harm the country and by extension its copper exports. We’re far less worried about Chile’s political stability – and much more concerned with declining copper ore quality just as emerging markets prioritize building new electricity networks and as developed markets turn to renewable energy technologies, for which copper is critical. 

Is Ethiopia on the verge of government collapse? In Ethiopia, a prominent Oromo Liberation Army leader said that his group had formed a military alliance with Tigray forces. Ethiopian Prime Minister Abiy Ahmed called on “all capable Ethiopians” to join the war against the Tigray forces, while fighting has spread from Tigray to the neighboring Afar and Amhara regions.

What it means: Since last September, we’ve been writing about the deteriorating political situation in Ethiopia. If you need a quick refresher: Abiy indefinitely postponed elections. The Tigray region defied Abiy and went ahead with elections anyway. Eventually, Abiy dispatched the Ethiopian military to put down this political rebellion. Instead of asserting central government control, however, the Ethiopian government appears to have opened a Pandora’s box of regional grievances, in part due to its brutal crackdown on Tigray. Calling on all Ethiopians to fight an enemy approaching smacks of desperation from the former Nobel Prize winner. 

Climate change. The UN’s Intergovernmental Panel on Climate Change (IPCC) released a new report on climate change that it described as a “code red for humanity” and the last chance to avert climate catastrophe. The U.S. called on OPEC+ to increase oil production, describing its recent production increases as “simply not enough.”

What it means: We intentionally paired these items together. There is a wide gulf between the urgency of the UN report and the actions and policies of world government, best symbolized by the cognitive dissonance of a U.S. government that has been talking incessantly about its commitment to renewables chastising OPEC+ for not pumping enough hydrocarbons. From a purely analytical viewpoint, we note that the demise of the hydrocarbon economy has been greatly exaggerated. From the viewpoint of what our planet is going to look like for future generations, it is hard to feel anything but scared. #realtalk

Honorable mention

China found Canadian businessman Michael Spavor guilty of espionage and sentenced him to 11 years in prison.

Japan’s SoftBank Group said it will pause investing in China until the situation around regulatory action against tech companies becomes “clearer.”

Japanese Prime Minister Yoshihide Suga’s government received its lowest approval ratings (just 29 percent) since taking power.

Taliban fighters in Afghanistan continue to make rapid progress in taking over the country, capturing provincial capitals en route to Kabul.

U.S. intelligence sources indicate that Kabul might fall within 90 days.

The Mexican government is suing American gun makers for damages caused by illicit firearms.

Polish lawmakers approved a controversial media law that prevents firms from outside the European Economic Area from owning majority stakes in Polish media companies.

A joint force of Mozambican and Rwandan troops regained control of Mocímboa da Praia from Islamist insurgents.