Supply Chain Weekly Wrap-Up 02/24/2023-03/02/2023

Supply Chain Weekly Wrap-Up 02/24/2023-03/02/2023

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China calls out Australia after rare material deal is blocked

China has called out the Australian government for blocking a bid by a Chinese-linked company to boost its ownership in a rare earth’s supplier. This would be the second time recently that the Australian government has blocked Chinese lead investment into their mineral industry. As they intervened to stop Singapore-based Yuxiao Fund to raise its stake in Northern Minerals Ltd to 20% from 10%. Its suspected that this is due to the owner being Wu Yuxiao, a Chinese national who invests in commodities internationally.

The response of China is that these practices are discriminatory and unfair. The Foreign Minister Mao Ning said, “We hope that Australia can provide a fair and non-discriminatory environment for Chinese enterprises to operate in Australia.” This can be seen as a response to Australia feeling that China has imposed unofficial trade blockages. Nonetheless, the relations between the two countries are said to have been improving.

Australia has previously said it would become more selective about who it allows to invest in its critical minerals industry, as they have concerns about creating monopolies.  So this rejection of Chinese investment they will argue is not unfair, but a rule for all foreign investors. Northern Minerals plans to become the first significant world producer of dysprosium, (a key component for magnets for electric vehicles) outside of China, which controls 94% of the supply.

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LG and Honda announcement for joint venture in US

LG Energy Solution and Honda Motor held a ceremony for their electric vehicle (EV) battery production joint venture in the United States. The companies are building their new plant in Jeffersonville, Ohio. LG and Honda’s EV battery joint venture has been named L-H Battery Company. The construction officially starts, the companies are expecting the facility to be completed by the end of 2024.

When completed, the facility will begin mass production of EV batteries that will be supplied to Honda Motor’s factory in North America from the end of 2025. The facility is being built using the $4.4 billion total investment for this project. It is expected to have a production capacity of 40 gigawatts hours per year. LG chief executive officer, Robert H. Lee, said in a press release. “It is an honor to represent two great corporations, Honda and LG Energy Solution, both with a long, proud history of success. LG Energy Solution is the leading battery manufacturer globally and is investing aggressively to meet the demand for electrification.”

The collaboration is for Honda to incorporate LG’s battery making expertise, into their supply chain to improve their EV fleet. In North America the mainstream market for EV is almost a decade old and well established. However, the demand for EV is still growing.

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Ameriflight grows supply chain services with cargo drones

U.S. cargo airline company Ameriflight signed a letter of intent to purchase 35 air cargo drones from Sabrewing Aircraft Company as it grows its supply chain services. The purchase agreement with Sabrewing marks Ameriflight’s second drone deal this year, as the company looks to diversify its aviation services and explore new business opportunities in distribution center logistics.

Ameriflight, which counts UPS among its top customers, intends to use the aircraft’s vertical landing and takeoff capabilities to quickly transport cargo to off-airport alternative landing zones. That will help shippers develop a more efficient warehouse distribution network. This s to improve last mile delivery efficiency. As drones are more versatile and with the right training easier to use as they can be manned or be autonomous.

Cargo drone companies have been capitalizing on opportunities presented by carriers and other supply chain stakeholders looking to build out their last-mile and express logistics networks.

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