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Around the halls: Russia, Ukraine, Kazakhstan, and the European security order

Late last year, on the eve of the 30th anniversary of the dissolution of the Soviet Union, Russia massed troops on its border with Ukraine and issued draft agreements with the U.S. and North Atlantic Treaty Organization (NATO) spelling out demands for…

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By Pavel K Baev, Jessica Brandt, Vanda Felbab-Brown, Samantha Gross, Daniel S. Hamilton, Marvin Kalb, Patricia M. Kim, Kemal Kirişci, Michael E. O'Hanlon, Steven Pifer, Melanie W. Sisson, Constanze Stelzenmüller, Angela Stent

Late last year, on the eve of the 30th anniversary of the dissolution of the Soviet Union, Russia massed troops on its border with Ukraine and issued draft agreements with the U.S. and North Atlantic Treaty Organization (NATO) spelling out demands for changes to the European security order including no further expansion of NATO. With the United States and its European allies and partners embarking on a series of pivotal negotiations with Moscow beginning January 9 in Geneva, mass protests erupted in Kazakhstan in the first week of 2022 and the Russia-led Collective Security Treaty Organization (CSTO) intervened militarily at the request of Kazakh President Kassym-Jomart Tokayev. What are Russian President Vladimir Putin’s intentions? How should the U.S. and its allies respond to Russia’s moves? What are the implications of the Kazakhstan uprising? Below, Brookings experts reflect on recent developments in the former Soviet Union and offer policy recommendations.



Pavel K. Baev
Nonresident Senior Fellow, Center on the United States and Europe

There was never a chance for a breakthrough at the U.S.-Russia talks in Geneva exacted by President Putin’s unprecedented demand for one-sided “security guarantees.” U.S. Deputy Secretary of State Wendy Sherman spent a long seven hours checking the depth of disagreements with Russian Deputy Foreign Minister Sergey Ryabkov, who had announced beforehand that no deviations from the draft agreement published by Moscow in mid-December were possible. Russian demands for discontinuing all military ties between the United States and Ukraine were clearly unacceptable, but Ryabkov expressed satisfaction that the Russian position was taken “very seriously.” If Russia seeks to prove that its behavior will be neither stable nor predictable, despite President Joe Biden’s request presented to Putin in the same city half a year ago, it has succeeded exceedingly.

Material evidence of Russia’s propensity for reckless power projection is supplied by the swift intervention into suddenly riotous Kazakhstan on the eve of Orthodox Christmas. Only some 2,000 paratroopers were airlifted under the pro-forma aegis of the Collective Security Treaty Organization, but the appointment of General Andrei Serdyukov, the seasoned commander of Russian Airborne Troops, as the commanding officer of the operation indicated that any number of reinforcements could be forthcoming. Tense stability has been restored in protest-overwhelmed Almaty, and Russia has established for fact that it can act as security provider and order enforcer in its immediate neighborhood. This success bodes ill for Ukraine, which has to assume that Russian tanks are amassed on its borders for purposes more ominous than just supporting talks with the West.


Jessica Brandt ()
Policy Director, Artificial Intelligence and Emerging Technology Initiative, and Fellow, Center for Security, Strategy, and Technology

On an ongoing basis, Russia uses a suite of asymmetric tools — including information manipulation and cyber operations — to weaken the European security order and undermine democratic states and institutions that could organize against its interests. This is part of its playbook for Ukraine.

In the information domain, the Kremlin is already deploying a “divide and discredit” strategy. For weeks, Russian state media and diplomats have been hammering differences between the United States and its European partners over their approach to the crisis and working to dent the credibility and appeal of NATO — an essential institution of the liberal international order — casting it as the true aggressor. This is part of a long-running strategy to weaken the trans-Atlantic partnership, undermine European cohesion, and disparage liberal institutions, including NATO. If tensions increase, Washington should expect this activity to intensify.

Meanwhile, cybersecurity experts have noted an uptick in intrusions into Ukrainian computer networks, both government and civilian, that could set the stage for a major cyberattack. That would not be without precedent. Russian hackers have previously taken aim at Ukraine’s election infrastructure and energy grid, the Kyiv Metro, and the Odesa airport, among other targets. Policymakers should take seriously the possibility of an attempt to disrupt Ukraine’s economy and government. It’s good, then, that Washington and London have reportedly sent experts to the country to help bolster its defenses against such a move.


Vanda Felbab-Brown ()
Senior Fellow, Center for Security, Strategy, and Technology

A Russian invasion of Ukraine would constitute perhaps the greatest global security crisis in three decades. However, even should talks with Russia avert this without the West making troubling concessions to Russia’s extravagant demands, Putin will succeed in accomplishing some of his nefarious objectives. Putin’s crisis-making consumes the attention of top U.S., NATO, and European policymakers and reduces their focus on other important issues, from the crises in Afghanistan, Somalia, and Ethiopia to the slow-burning morass in Mexico or Venezuela to long-term existential matters such as preventing zoonotic diseases, preserving global biodiversity, and stabilizing the planet’s climate.

No doubt, highly competent officials with regional and functional portfolios remain focused on those issues, but the principals’ attention is depleted by their need to respond to the Putin-orchestrated crisis. Moreover, Putin can maintain such crisis-making for months, leaving troops at the Ukrainian border, withdrawing them, putting them back, and perhaps one day — during crisis number three or four or six — actually invading, undeterred by further Western economic sanctions.

Meanwhile, while tying up high-level U.S. policy focus in eastern Europe, Russia intensely meddles in some of the very places from which it diverts American attention. Across Africa, the Middle East, Asia, and even Latin America, Russia has built up a variety of tools and proxy actors — from disinformation campaign trolls to Moscow-linked “private” security companies problematically propping up regimes in exchange for security access and resources. Often Russia’s objective is simply to frustrate U.S. goals, regardless of their substantive content.


Samantha Gross ()
Fellow and Director, Energy Security and Climate Initiative

Both Europe and Russia have a lot to lose in the energy space if the situation in Ukraine escalates. Russia is the largest supplier of natural gas to the European Union, providing more than 40% of EU imports. Europe is now suffering through a crisis in gas supply. High demand and low storage and supply are combining to create natural gas prices 4.5 times those at this time last year, although down a bit from their highest levels in December.

On the one hand, Russia is enjoying today’s very high gas prices, an argument for stepping back from the brink. Germany has also indicated willingness to stop the nearly completed Nord Stream 2 pipeline if Russia’s aggression against Ukraine escalates. On the other hand, Europe can ill afford to lose any gas supply right now, meaning that applying sanctions on Russian gas or reducing purchases from Russia would be very painful, a situation President Putin surely understands.

On top of these strategic questions lies the security of the gas supply itself. Transit of Russian gas provided $2 billion in revenue to Ukraine in 2020, meaning that Ukraine has every reason to protect the compressors that keep the pipelines running. Russia too has reason not to damage the pipelines, since an estimated 35% of Russia’s gas exports still go through Ukraine. Despite years of building new pipelines that bypass Ukraine, the country is still central to Russia’s energy economy.


Daniel S. Hamilton (@DanSHamilton)
Nonresident Senior Fellow, Center on the United States and Europe

Putin’s saber-rattling is not only existential for Ukraine, it is the most visible, dangerous, and urgent sign that Europe has moved from an era of relative stability to an age of ongoing disruption.

Putin wants to undo the post-Cold War settlement, control his neighborhood, and disrupt the influence of open democratic societies, not because of what they do but because of who they are. It is useful to recall that the pretext for Russia’s 2014 invasion of Ukraine was not NATO expansion, it was a trade agreement between Ukraine and the European Union. Putin understands the challenge a successful Ukrainian democracy would pose to authoritarianism in Russia. Through his current threats and his earlier military interventions in Ukraine, his meddling in neighboring countries, and his continuing use of energy, cyber, and other instruments as political tools, his message is clear: Hard power still matters, and borders in Europe can still be changed by force. He is intent on expanding the arena of competition, not only to the post-Soviet space, but to democracies in Europe and beyond.

Today, Ukraine is the crucible of Europe’s disruption. Our most immediate challenge is to deter Russian aggression there. Tomorrow, others will be tested — and not only by Russia. New technologies are changing the nature of competition and conflict. Digital transformations are upending the foundations of diplomacy and defense. China is disrupting basic principles and arrangements critical to Europe’s security and prosperity. Europe’s earthquake did not end in 1989 or 1991. It continues to rumble.


Marvin Kalb ()
Nonresident Senior Fellow, Foreign Policy

Russian armies roam the Eurasian landmass, as though they’re operating in their own backyard. That’s not to President Biden’s liking, and it certainly raises urgent questions for NATO. It seems to be putting East and West on another collision course.

In recent months, tens of thousands of Russian troops have congregated near the Ukrainian border, and in recent days thousands have actually crossed the border into Kazakhstan in an effort to crush a widespread uprising.

There are differences in Russia’s approach to these two former Soviet republics. In 2014, Russia seized Crimea and moved into the Donbas region of Ukraine. Cover stories were concocted, but Russia’s strategic intent was obvious — Moscow was trying to topple the pro-West regime in Kyiv. Russian President Vladimir Putin apparently believes history has given him a mysterious right to act. In Kazakhstan, Russia invaded as part of an international force, providing convenient cover, but again Russia’s strategic intent is obvious: to keep Kazakhstan in friendly hands.

Whether Russia might now exploit her military presence there to readjust borders is uncertain but possible. Former President Boris Yeltsin warned that Russia “reserves the right” to change her borders with Kazakhstan, and Putin maintains that “Kazakhs never had any statehood” before the Soviet collapse anyway.

A dangerous question emerges, because Putin seems serious about his reading of Russian history: How can the West challenge this notion without sliding step by step into a military confrontation with Russia, something neither side wants?


Patricia M. Kim ()
David M. Rubenstein Fellow, John L. Thornton China Center and Center for East Asia Policy Studies

The mounting crises over Ukraine and in Kazakhstan have raised questions about China’s stances on both, as well as implications for Sino-Russian ties and the larger geopolitical landscape. Beijing’s foremost priority is to maintain stability in its periphery as it looks to orchestrate the Winter Olympics and the 20th Party Congress, all the while struggling to maintain a zero-COVID policy.

China has adopted relatively low-key positions on both Ukraine and Kazakhstan thus far. Beijing has expressed support for Kazakh President Tokayev in his fight against “external forces,” and the dispatch of Russian troops to the former Soviet republic under the auspices of CSTO. Beijing has also avoided taking sides between Moscow and Kyiv in attempts to stay on good terms with both. While Presidents Xi and Putin used their virtual meeting in December to collectively denounce Western “interference” in their internal affairs, official Chinese readouts were careful not to explicitly reference Putin’s demands for security guarantees from NATO and the United States. Just a few weeks later, Xi sent a congratulatory message to Ukraine to mark the 30th anniversary of the establishment of bilateral ties. These developments suggest that while Beijing sees value in working closely with Moscow to push back against “Western encirclement,” it is not willing to back specific Russian core interests.

Moreover, a Russian intervention in Kazakhstan and growing Russian sphere of influence in China’s backyard are ultimately at odds with Beijing’s long-term interests. U.S. policymakers would be wise to keep these contradictions and larger picture in mind, while working to prevent further solidification of Sino-Russian ties.


Kemal Kirişci (@kemalkirisci)
Nonresident Senior Fellow, Center on the United States and Europe

As Putin resorts to military pressure on Ukraine and raises demands on the U.S. for changes to the European security order, neighboring countries are revisiting their policies towards Russia. The debate over Finland and Sweden becoming NATO members has been revived triggering promises of an “appropriate response” from Russia. The position of Turkey moving forward is also evolving.

During the last few years, under President Recep Tayyip Erdoğan, Turkey’s relations with Russia has wavered between strategic partnership and rivalry. As late as in September, after meeting with Putin, Erdoğan reasserted his commitment to the partnership with Russia and reiterated his position on keeping Russian S-400 missiles despite U.S. sanctions. Yet Russian threats to invade Ukraine is reviving the weight of history marked by frequent wars, which Turks mostly lost, reinforced by Josef Stalin’s territorial demands in 1945 that propelled Turkey into NATO 70 years ago in February.

Recently, the geopolitical significance of NATO membership has been reiterated by two prominent retired Turkish ambassadors, a small but important uptick in importance attributed to NATO from 48% in 2020 (slide 83) to 58% in 2021 (slide 90) has been reported among the Turkish public. Possibly more significant might be Turkish efforts to shore up the defenses of Ukraine, which has drawn Putin’s ire, and Georgia. With Turkey having the second largest military in NATO and a unique geographical position commanding the Black Sea, these recent developments should be factored into formulating a response to Russian demands.


Michael E. O’Hanlon (@MichaelEOHanlon)
Senior Fellow and Director, Center for Security, Strategy, and Technology

NATO cannot give in to Russian bullying or allow Russia a sphere of influence over its formerly subjugated neighbors. Putin’s demands about Ukraine and eastern Europe are unacceptable as stated.

But we need to develop new concepts for future European security.  Ukraine and Georgia should not be in NATO — even if Moscow should not be able to make that decision for them.

The core concept for future European security in eastern Europe would be one of permanent neutrality for former Soviet republics that are not now in NATO or the Russia-led CSTO. They should retain their sovereign rights to join any other international organization.

However, security alliances should not be used by Washington and Brussels as democracy promotion tools or instruments to advance the “European project.” They represent solemn promises to treat another’s territory as our own, and send American troops to fight and die in defense of allies, if needed. As the North Atlantic Treaty’s Article 10 underscores, alliance enlargement should not happen unless we genuinely believe it would contribute to a more stable Europe.

The new security architecture must require that Russia withdraw its troops from Ukraine and Georgia (and Moldova, most likely) in a verifiable manner. The Crimea issue would have to be finessed, since Moscow almost certainly will not give that strategic peninsula on the Black Sea back to Ukraine. After that occurred, corresponding sanctions that have been imposed on Russia due to its aggressions against neighbors could be lifted, though “snapback” provisions would remain in case Russia subsequently violated its promises.


Steven Pifer (@steven_pifer)
Nonresident Senior Fellow, Center for Security, Strategy, and Technology and Center on the United States and Europe

Moscow has manufactured a crisis by deploying large military forces near Ukraine and has demanded security guarantees in its draft U.S.-Russia and NATO-Russia agreements. Many provisions in those drafts are unacceptable to Washington and NATO, while others offer a basis for discussion and perhaps negotiation. The big question: Does the Kremlin intend its draft agreements as an opening bid in a serious give-and-take negotiation, or does it seek rejection, which it would add to its list of grievances to justify a military assault on Ukraine?

U.S. and Russian officials met Monday and described their talks as serious. However, Russian Deputy Foreign Minister Sergey Ryabkov stressed Moscow’s demand that NATO foreswear further enlargement and rule out Ukraine and Georgia ever joining. U.S. Deputy Secretary of State Wendy Sherman termed that a “non-starter” but saw possibilities to address issues such as missiles in Europe and constraints on military exercises. Ryabkov left the door open for dialogue. There will be a NATO-Russia meeting tomorrow, and the Organization for Security and Co-operation in Europe meets on Thursday.

NATO should engage Russia on its concerns regarding military activities, provided that Moscow addresses the concerns others have about Russian activities on a reciprocal basis. But it is not legitimate for the Kremlin to seek a veto over NATO enlargement or Kyiv’s foreign policy. While remaining ready to talk, the West should reiterate that Russian military action against Ukraine would lead to painful costs and consequences.

It will then be up to Vladimir Putin to decide how to answer the big question.


Melanie W. Sisson (@MWSBrookingsFP)
Fellow, Center for Security, Strategy, and Technology

If Putin invades Ukraine, it will not be because the Biden administration’s strategy is bad. To the contrary, the administration has done well to make clear the costs Russia will face as a result of aggression. It was wise, moreover, for Biden to establish early that the United States will not commit ground troops either to blunt or to eject Russia should it invade — the interests at stake do not justify direct U.S. involvement.

In the weeks leading into negotiations there has been much preoccupation with what it is that Putin wants. With few exceptions, there has been very little open discussion of what it is that Washington wants, other than Russian forbearance from invading Ukraine.

A negotiating position that requires Russia to do more than simply retrench from Ukraine, and that offers concessions in return, will indicate that the U.S. and NATO agree with Putin that the European security architecture needs revision. If the U.S. and NATO have no such demands for revision, however, they should be unwilling to make any concessions at all. In that case, a Russian invasion will accurately reflect the two sides’ relative satisfaction with the current order. So long as the U.S. and its allies hold firm and impose the threatened costs, they will be demonstrating their belief that the primary tenets of European security are sound. If that is indeed the administration’s position, then its deterrent strategy doesn’t have to work in order to succeed.


Constanze Stelzenmüller (@ConStelz)
Senior Fellow, Center on the United States and Europe

Sunday marked the beginning of a week of negotiations that could prove decisive for the European security order and the trans-Atlantic alliance. After the Kremlin’s two “treaty drafts,” it is clear that for Russia, the goal is to reestablish dominion in eastern Europe, and push the U.S. out of Europe — effectively ending NATO. Russia threatens to use military force against Ukraine in order to achieve this much greater strategic goal.

The alliance response ought to be correspondingly clear and forceful. Specifically, it should state clearly what the West wants from Russia. A start would be: that there will be no further discussions unless Russia moves back its troops to a determined line — say 100 kilometers from the Ukrainian border.

Here are three more things the alliance could and should do:

  1. A declaration of first principles: NATO will not succumb to military threats for political goals; territorial borders are inviolable; countries are free to choose their own alliances. (And remind the Russians, who like to brandish treaties, of exactly where and when they signed on to these principles.)
  2. Counter disinformation about alliance disunity by regularly publishing statistics about U.S.-European consultations.
  3. Establish a cross-alliance task force to map out the prospective relative impact of Western economic sanctions on individual alliance members and discuss potential instruments to mitigate blowback.


Angela Stent (@AngelaStent)
Nonresident Senior Fellow, Center on the United States and Europe

If the U.S. went into the Geneva talks hoping to ascertain whether Russia is serious about negotiating about Euro-Atlantic security issues or merely using what it will claim are failed negotiations to justify another military incursion into Ukraine, then it did not receive an answer. Deputy Foreign Minister Sergey Ryabkov agreed to continue negotiating but also said that a guarantee that NATO would not expand further was non-negotiable for the Russians — just as foreclosing NATO enlargement is a non-starter for the Americans.

It is not clear why Putin manufactured the crisis on the Ukrainian border at this particular time — he has been making many of his complaints about the U.S. and NATO since his Munich speech in 2007 — but he clearly senses this is an opportune time with the U.S. distracted by COVID-19 and its dysfunctional political system and key European players focusing their attention elsewhere. The deployment of Russian troops in Kazakhstan at the request of its beleaguered president strengthens Putin’s hand and reinforces his claim that Russia’s neighbors want to be in the Russian sphere of influence.

Putin’s goal is a wholesale relitigating of the post-Cold War settlement in Europe, hoping that the U.S. will withdraw and focus on its own domestic troubles. Where do we go from here? Best case: revived negotiations on the now-defunct Intermediate-Range Nuclear Forces Treaty and the Conventional Armed Forces in Europe Treaty. Worst case? Another military incursion into Ukraine followed by punitive sanctions on Russia which will also adversely affect Western economies.

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Dr. Peter McCullough: Official COVID “Narrative Has Crumbled”

Dr. Peter McCullough: Official COVID "Narrative Has Crumbled"

Authored by Art Moore via WND.com,

Dr. Peter McCullough – a renowned cardiologist and highly published medical scientist whose confrontation of the government’s COVID-19 policies.

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Dr. Peter McCullough: Official COVID "Narrative Has Crumbled"

Authored by Art Moore via WND.com,

Dr. Peter McCullough – a renowned cardiologist and highly published medical scientist whose confrontation of the government's COVID-19 policies has drawn more than 40 million views on Joe Rogan's podcast – told WND in a video interview Thursday night the official pandemic narrative that has been fiercely guarded by establishment media and social-media censors is "completely crumbling."

That narrative, he said, included "false statements regarding asymptomatic spread, reliance on lockdown and masks – which obviously didn't work – the suppression of early treatment, the mass promotion of vaccines that failed."

"And now here we are, almost in complete free fall," McCullough said, referring to the record number of COVID-19 cases as officials acknowledge the vaccines don't prevent infection or transmission.

McCullough noted that in California, with the more contagious but much milder omicron variant now dominant, health care workers who tested positive for COVID-19 and had symptoms were told to go back to work.

"With that, I think that's it. I think that's the end. The narrative has crumbled. People don't want these vaccines," McCullough said.

"The vaccines should be pulled off the market. They clearly are not solving the problem."

The focus, he said, should be on "treating high-risk patients who develop symptoms" with some of the early treatments that he and other physicians around the world have found to be effective, including ivermectin and a new drug granted emergency use authorization by the FDA, Paxlovid.

McCullough cited a study from Denmark and data from the U.K.'s health agency showing that the vaccines have zero effectiveness against omicron.

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"That's not misinformation," he said. "I'm just quoting the data. All of this can be looked up. Fact-checkers can look at it. I know I'll never have any problems with allegations of misinformation, because I just quote the data."

President Biden clearly had McCullough in mind when on Thursday he urged social media companies and media outlets to "please deal with the misinformation and disinformation that's on your shows. It has to stop."

McCullough pointed out his work has been relied upon by courts across the nation, including the U.S. Supreme Court, and he has testified to the U.S. Senate and will be back there later this month.

"I think America knows who is giving them the straight story."

In the half-hour video interview with WND (embedded below), McCullough also discussed:

  • The punishment of physicians who counter the official COVID narrative and use clinically indicated, FDA-approved drugs off-label such as ivermectin to treat COVID-19 patients, including a colleague in Maine whose was ordered to undergo a psychological examination after her license was suspended;

  • His participation in a rally in Washington, D.C., on Jan. 23 protesting vaccine mandates;

  • The Supreme Court's rulings Thursday on vaccine mandates;

  • The possibility that omicron could spell the end of the pandemic, serving as a "universal booster";

  • Data showing that vaccination has backfired, making the pandemic worse in nations with high vaccine intake;

  • The lethality of the mRNA vaccines;

  • His view on Biden's mass testing program;

  • His take on new FDA-approved treatments and his simple, inexpensive, over-the-counter protocol for treating omicron;

  • The unwillingness of so many doctors to "come off the sidelines" and treat patients for COVID-19;

  • The "crisis of competence" among top government health officials;

  • Where to find resources and support for physicians and patients, and for employees confronting mandates.

"I think Americans are going to understand that their individual choice is really what's going to matter in the end," he McCullough told WND in conclusion. "If Americans decide that they're not going to take any boosters or any more vaccines, it doesn't matter how many mandates or how many court decisions that happen. The vaccine program is going to crumble. I think it's just a matter of saying no."

He emphasized that the vaccines are still "research."

"No one can be forced into it," he said of vaccination. "And they're not turning out to be safe or effective. So, if  everybody just stands firm and declines the vaccines, I think that will be the quickest way for us to get out of this."

See the WND interview with Dr. Peter McCullough:

McCullough, in a video interview with WND in December, called for a "pivot" from the current policies to early treatment and "compassionate care" for those who have COVID or have suffered vaccine injuries, which have included myocarditis, neurological issues and blood clotting.

"Now is the time for doctors to step up. Now is not a time for rhetoric or harsh statements regarding scientific discourse," he said.

Many of McCullough's 600 peer-reviewed publications have appeared in top-tier journals such as the New England Journal of Medicine, Journal of the American Medical Association and The Lancet. He testified to the U.S. Senate in November 2020 against what he described as the federal government's politicization of health care during the pandemic, curbing or blocking the availability of cheap, effective treatments. In a speech in September, he told of having been stripped of the editorship of a Swiss-based journal after having lost his position with a major health system, "with no explanation and no due process." Baylor University Medical Center fired him in February. And Texas A&M College of Medicine, Texas Christian University and University of North Texas Health Science Center School of Medicine have cut ties with McCullough, accusing him of spreading misinformation.

"I've been stripped of every title that I've ever had in that institution. I've received a threat letter from the American College of Physicians, [and] a threat letter from the American Board," he said in September.

All because of his "lawful" participation "in a topic of public importance."

He said there are "powerful forces at work, far more powerful than we can possibly think of, that are influencing anybody who is in a position of authority."

McCullough is the chief medical adviser for the Truth for Health Foundation, a physician-founded charity that says it is "dedicated to following the Oath of Hippocrates to serve individual patients to the best of our ability and judgement and to uphold the highest standards of medical ethics."

*  *  *

Last year, America's doctors, nurses and paramedics were celebrated as frontline heroes battling a fearsome new pandemic. Today, under Joe Biden, tens of thousands of these same heroes are denounced as rebels, conspiracy theorists, extremists and potential terrorists. Along with massive numbers of police, firemen, Border Patrol agents, Navy SEALs, pilots, air-traffic controllers, and countless other truly essential Americans, they're all considered so dangerous as to merit termination, their professional and personal lives turned upside down due to their decision not to be injected with the experimental COVID vaccines. Biden’s tyrannical mandate threatens to cripple American society – from law enforcement to airlines to commercial supply chains to hospitals. It's already happening. But the good news is that huge numbers of "yesterday’s heroes" are now fighting back – bravely and boldly. The whole epic showdown is laid out as never before in the sensational October issue of WND's monthly Whistleblower magazine, titled "THE GREAT AMERICAN REBELLION: 'We will not comply!' COVID-19 power grab ignites bold new era of national defiance."

SUPPORT TRUTHFUL JOURNALISM. MAKE A DONATION TO THE NONPROFIT WND NEWS CENTER. THANK YOU!

Tyler Durden Mon, 01/17/2022 - 23:50

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Graphite Outlook 2022: Demand from Battery Segment to Remain High

Click here to read the previous graphite outlook. Graphite is an essential raw material used in electric vehicle (EV) batteries, and as sales of EVs grow, market watchers believe demand for the metal will surge. Despite discussions about battery chemistry

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Click here to read the previous graphite outlook.

Graphite is an essential raw material used in electric vehicle (EV) batteries, and as sales of EVs grow, market watchers believe demand for the metal will surge.

Despite discussions about battery chemistry changes, many experts think graphite will remain a dominant element in EV batteries for at least the next decade. Both synthetic graphite and natural graphite, in the form of the intermediate product spherical graphite, are used in the anodes of lithium-ion batteries.

Here the Investing News Network (INN) looks at the key trends in the graphite market in 2021 and what the graphite outlook is for 2022.


Graphite trends 2021: Shipping and power cost challenges


After a tumultuous 2020 in which supply chains were put to the test as economies shut down due to the coronavirus pandemic, graphite kicked off 2021 on a bright note.

In early 2021, prices for natural flake graphite were slightly higher than expected as a result of unexpectedly strict environmental investigations and closures in China, Suzanne Shaw of Wood Mackenzie told INN back in July.

“There was also considerable shipping disruption early on in the year with containers and vessels not where they should be as routes reopened post-COVID,” she said. “Limited availability was prioritized for higher-value cargos, with lower-value raw materials flows disrupted. This situation subsided through Q2.”

Pricing was relatively flat during the first six months of 2021, according to Benchmark Mineral Intelligence data.

“Prices for +100 mesh flake concentrate, across all purities, have moved upward by around 5 to 10 percent year-to-date, while pricing for all other grades has moved less than 5 percent so far this year due to continued structural oversupply in the graphite market,” Miller told INN at the end of H1. “Moreover, the global shipping situation at the moment is hindering upward price pressure.”

Prices took a turn in August, jumping on the back of the energy crisis, which hit producers and disrupted output. Battery grades were particularly hit by rising power costs as both the manufacture of synthetic graphite and the processing of spherical graphite from natural flake are known for their high levels of energy consumption.

In terms of supply, Chinese production was expected to ramp up to meet rising domestic battery demand, as there is still a lot of overcapacity in China.

“However, the overall trend is that China is showing less appetite on the raw material side and investing in higher-value downstream industries rather than exploration/mining across most mineral sectors,” Shaw said at the end of H1. “It will continue to increase its own imports of flake graphite.”

Meanwhile, on the synthetic graphite front, the market could be driven into a deficit as a result of increasing demand from the lithium-ion battery and downstream EV sectors worldwide, Roskill, which was acquired by Wood Mackenzie, reported back in August.

“From a performance perspective, EV automakers prefer synthetic graphite, citing its superior fast charge turnaround and battery longevity,” a November Fastmarkets report reads. “Synthetic graphite, however, is costly, power intensive and environmentally unfriendly, with supply centered in China at odds with North American and European automakers’ desire for more localized supply.”

Graphite outlook 2022: What’s ahead


At the end of last year, analysts were expecting demand from the battery segment to continue to grow on the back of increased EV sales, with growth opportunities for both synthetic and natural graphite.

According to Benchmark Mineral Intelligence data, demand for natural graphite from the battery segment amounted to 400,000 tonnes in 2021, with that number expected to scale up to 3 million tonnes by 2030. Meanwhile, demand for synthetic graphite reached about 300,000 tonnes in 2021 and it’s expected to increase to 1.5 million tonnes by 2030.

“We do expect recycling to plug some of these gaps, but this isn't really likely to reach the necessary scale until post 2030,” Miller said in a December webinar. “So at the moment, the focus is really on synthesizing and mining this material as quickly as possible to meet the demand that we might see into the future.”

By volume, graphite is one of the most important elements in any electric vehicle battery ― there is between 50 and 100 kilograms of graphite, whether synthetic or natural, present within each vehicle.

“We can really see the sector growing progressively to around 15 times the demand we see today by 2030, outpacing moderate growth and demand from industrial applications,” Miller said.

That said, it's important to note that only certain types of natural graphite supply are relevant to and able to be qualified for the lithium-ion supply chain.

“This is really the biggest challenge in using natural graphite as a battery input,” Miller said. “This has the potential to exclude further capacity from projects in development.”

The expert explained that if all planned supply reached the market, it would have the potential to balance out demand up to 2029 to 2030, but with these limitations on which material can be qualified, the story takes a different direction.

“The primary limitation here is the mesh size inputs for the battery supply chain must be fine to medium flake,” Miller said, adding that consistency and high purity, somewhere around 94 to 95 percent carbon, is also key. “Flake graphite for the lithium ion supply chain must have low levels of impurity in order to avoid compromising the quality and longevity of the end product.”

According to Benchmark Mineral Intelligence, today, synthetic graphite anodes make up the majority of market share and approximately 57 percent of the anode market.

“Going forward, we do expect this to shift in the direction of natural graphite anodes to around a 50-50 balance for a multitude of reasons,” Miller said. His reasons include tight graphitization capacity, higher costs for synthetic graphite anode material and also the environmental shortcomings of the synthetic graphite supply chain at the moment.

Graphitization is the process of producing synthetic graphite from carbon-rich, oil-derived feedstock raw materials, and this process is energy intensive.

“In China, graphitization capacity has been mainly located in Inner Mongolia, a province which has some of the lowest energy costs in the country and where other high-energy metal producers, such as ferro-chrome smelters, are based,” Fastmarket reports. “But Inner Mongolia was the first in the firing line when the 2021 energy crisis unfolded.”

This resulted in reduced production and unpredictable cost increases for synthetic graphite, and the reason why many battery manufacturers in China could turn to natural graphite instead.

Looking ahead at how overall demand for graphite will perform, Benchmark Mineral Intelligence expects the battery segment to challenge industrial applications as the leading end-market for graphite demand. Over the next decade, anode demand will grow at an average of 27 percent compound annual growth rate (CAGR).

“Unlike some of the other critical mineral markets, there is still time for both the natural and synthetic graphite market deficits to be redressed — so long as adequate funding is provided for junior miners in the near term,” Miller said.

Commenting on price performance, Fastmarkets maintains the view that both flake and spherical graphite prices will trend stable to higher in the near term.

“The only potential reprieve we see for graphite prices would be if the power constraints diminish EV lithium-ion battery production, and in turn reduce demand for graphite anodes sufficiently to stem the upward pressure on graphite prices,” analysts said.

Another key trend for graphite investors to watch in the new year is how western automakers keep up with China, which has become the dominant player in all steps of the anode supply chain.

Interestingly, before 2021 came to an end, US-based Tesla (NASDAQ:TSLA) made a move to secure graphite supply from top graphite producer Syrah Resources (ASX:SYR).

The ASX-listed company will process graphite from its Balama mine in Mozambique in its Louisiana plant, and will supply the EV maker with anode graphite material for an initial four year period. Tesla also has an option to offtake additional volume subject to Syrah expanding its capacity beyond 10,000 tonnes per year.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Zinc Outlook 2022: Small Refined Zinc Deficit Ahead

Click here to read the previous zinc outlook. Following an uncertain 2020, zinc prices steadily rose throughout 2021 to hit a 14 year high in the second half of the year.The power crisis and an increasing demand for the base metal as the strict lockdown..

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Click here to read the previous zinc outlook.

Following an uncertain 2020, zinc prices steadily rose throughout 2021 to hit a 14 year high in the second half of the year.

The power crisis and an increasing demand for the base metal as the strict lockdown restrictions were lifted supported prices during the 12 month period.

As the new year begins, the Investing News Network (INN) caught up with analysts to find out what’s ahead for zinc supply, demand and prices.


Zinc outlook 2022: 2021 in review


Prices kicked off the year above the US$2,800 per tonne mark after rallying for most of the second half of 2020. The recovery in the steel sector helped the base metal throughout the first half of 2021 as COVID-19 lockdown measures eased, supporting demand for zinc.

Commenting on the main trends seen in the market in 2021, Helen O’Cleary of CRU Group told INN zinc’s demand recovery was stronger than expected in the US and Europe but lagged in Asia excluding China.

In October, zinc prices hit their highest level in 14 years, hovering around the US$3,800 mark on the back of the power crisis and cost associated with carbon emissions.

“Zinc’s price outperformed expectations in 2021 on the back of strong demand and smelter disruption, particularly in Q4 when European smelters started to cut back due to record high energy prices,” O’Cleary said.

One of the world’s top zinc smelters, Nyrstar (EBR:NYR), said in October it was planning to cut production at its European smelter operations. Mining giant Glencore (LSE:GLEN) also said it was adjusting production to reduce exposure to peak power pricing periods during the day.

Speaking with INN about zinc’s performance, Carlos Sanchez of CPM Group said zinc has been in recovery since prices bottomed out in 2020, helped in part by vaccination globally and also by supply disruptions around the world.

“The most recent issue is the concern about high energy input costs into smelters in Europe — that's been pushing prices higher recently,” he said.

Even though prices could not sustain that level until the end of the year, prices remained above US$3,500 on the last trading day of 2021.

Zinc outlook 2022: Supply and demand


As mentioned, demand for base metals saw an upward turn in 2021 as the world economy recovered on the back of stimulus plans and as vaccination rollouts took place in many parts of the world.

Looking at what’s ahead for demand in 2022, CRU is expecting Chinese demand growth to slow to 1.1 percent year-on-year as the effects of stimulus wane.

“In the world ex. China we expect demand to grow by 2.4 percent, with the ongoing auto sector recovery partially offsetting the construction sector slowdown in Europe and the US,” O’Cleary said.

CPM is also expecting demand to remain healthy in 2022, both in China and outside of China, including demand from developing countries.

“One thing that remains uncertain is what will happen with COVID,” Sanchez said.

Moving onto the supply side of the picture, the analyst expects that if everything remains status quo, disruptions are unlikely to happen.

“There are going to be some blips here and there, but there have been some labor issues in Peru, yes, there's been some energy problems in Europe and China, but that's a fact in zinc output and in demand to an extent,” Sanchez said. “But really the catalysts that we don't know, and how it can affect prices is how COVID will impact industries.”

For her part, O’Cleary is expecting most disruptions in Q1, with CRU currently having a disruption allowance of 55,000 tonnes for that period.

“But this may well tip over into Q2,” she said. CRU is expecting mine supply to grow by 5.10 percent year-on-year in 2022 and for the concentrates market to register a 190,000 tonnes surplus.

Meanwhile, smelter output is forecast to grow by less than 1 percent year-on-year in 2022, according to the firm, which is currently forecasting a small refined zinc deficit in 2022.

“Should smelter disruption exceed our 55,000 t allowance the deficit could grow,” O’Cleary said. “But high prices and a tight Chinese market could lead to further releases of refined zinc from the State Reserves Bureau stockpile, which could push the market towards balance or even a small surplus.”

Similarly, CPM Group is also expecting the market to shift into a deficit in 2022.

“That's due to the strong demand, recovering economies of COVID and its financial economic effects,” Sanchez said.

Zinc outlook 2022: What’s ahead


Commenting on how prices might perform next year, O’Cleary said prices are likely to remain high in Q1 due to the threat of further energy-related cutbacks in Europe during the winter heating season.

O’Cleary suggested investors to keep an eye on high prices and inflation, as these factors could hamper zinc demand growth.

Similarly, CPM Group is expecting prices to remain above current levels and to average around US$3,400 for the year.

“I wouldn't be surprised to see zinc top US$4,000,” Sanchez said. “But at the same time, I don't think it holds above there; you'd have to have really strong fundamentals for that to happen, stronger than what's happening now.”

The CPM director suggested zinc investors should keep an eye on COVID developments and be quick movers, taking a position whether it's short or long.

Looking ahead, for FocusEconomics analysts, prices for zinc are seen cooling markedly next year before falling further in 2023, as output gradually improves and new mines come online.

“Moreover, fading logistical disruptions and easing energy prices will exert additional downward pressure, although solid demand for steel will continue to support prices,” they said in their December report, adding that pandemic-related uncertainty clouds the outlook.

Panelists recently polled by the firm see prices averaging US$2,827 per metric tonne in Q4 2022 and US$2,651 per metric tonne in Q4 2023.

Don’t forget to follow us @INN_Resource for real-time news updates.

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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