Latest / THE DAILY BRIEF / Iran attacks UAE, Bahrain aluminum plants

Transcript

Iran attacks UAE, Bahrain aluminum plants · THE DAILY BRIEF

• 0:01
  Speaker 1: Iran has widened its attacks across the Gulf and is
• 0:04
  Speaker 1: now targeting industrial facilities like plants belonging to two of
• 0:08
  Speaker 1: the world's largest aluminum producers. The Islamic Revolutionary Guard Corps
• 0:12
  Speaker 1: or IRGC for short, have claimed that the facilities were
• 0:15
  Speaker 1: linked to the US military. Several employees sustained injuries at
• 0:19
  Speaker 1: the facilities in the United Arab Emirates and Bahrain when
• 0:23
  Speaker 1: they were hit on Saturday. Aluminium Bahrain or Alba said
• 0:27
  Speaker 1: the strike caused significant damage to its plant. The UAE
• 0:30
  Speaker 1: operator also reported considerable damage to their site in Alta Vila.
• 0:35
  Speaker 1: The strikes came just hours after the IRGC promised to
• 0:39
  Speaker 1: retaliate for attacks on Iran's factories. They've accused Israel of
• 0:43
  Speaker 1: being behind them in coordination with the US. Let's discuss
• 0:49
  Speaker 1: this further with Justin Dargin. He is a senior non
• 0:52
  Speaker 1: resident Fellow at the Middle East Council on Global Affairs.
• 0:56
  Speaker 1: Just In, welcome to DW. Two aluminium production sites targeted
• 1:00
  Speaker 1: in the Gulf. Why how important does the aluminum industry
• 1:04
  Speaker 1: in this region?
• 1:06
  Speaker 2: Well, the aluminum industry in the Golf is extremely important.
• 1:11
  Speaker 2: We could consider that we could consider the industry to
• 1:13
  Speaker 2: be the crown jewel of the golf macroeconomic diversification. So basically,
• 1:19
  Speaker 2: these facilities they were basically invested in over the past
• 1:23
  Speaker 2: few decades or so, and this is how the Golf
• 1:26
  Speaker 2: views itself as being able to wean itself from the
• 1:28
  Speaker 2: oil economy, so basically, how the Golf would be able
• 1:31
  Speaker 2: to survive economically in.
• 1:32
  Speaker 3: A post oil world.
• 1:34
  Speaker 2: So what we see is that initially Iran had been
• 1:37
  Speaker 2: targeting much of the energy infrastructure of the region. Of course,
• 1:40
  Speaker 2: we see ports that were hit, pipelines, and also we
• 1:44
  Speaker 2: saw ros Lafan, the world's largest integrated alerngji production facility.
• 1:49
  Speaker 2: But now we see that Iran is moving to let's
• 1:52
  Speaker 2: say the more downstream elements of the energy sector. And
• 1:55
  Speaker 2: this is extremely important because what Iran is showing is that, okay,
• 1:59
  Speaker 2: if you are going to target our downstream industries such
• 2:03
  Speaker 2: as distill facilities in Zostan and then also Mobotica, then
• 2:07
  Speaker 2: we will target your facilities or the facilities that you have,
• 2:11
  Speaker 2: and also the countries that host elements of the US military.
• 2:15
  Speaker 2: So Iran sees that is being a type of what
• 2:18
  Speaker 2: you could call a part of the escalatory ladder. I mean,
• 2:21
  Speaker 2: so Iran views that as being proportionate, and Iran also
• 2:24
  Speaker 2: views that is being acceptable according to the laws of war.
• 2:29
  Speaker 2: I mean, that's from its perspective. So Iran is just
• 2:32
  Speaker 2: basically trying to assert its deterrence and saying that if
• 2:35
  Speaker 2: you attack our industrial base, then industrial base of the
• 2:38
  Speaker 2: region will be attacked in kind. And the region is
• 2:41
  Speaker 2: target rich. I mean, you have so many different concentrated
• 2:45
  Speaker 2: facilities that deal with the upstream industry in terms of
• 2:49
  Speaker 2: oil gas and then also manufacturing and then various other
• 2:56
  Speaker 2: industries as well. So this is quite a notable as
• 3:00
  Speaker 2: eation we see right now.
• 3:02
  Speaker 1: Could you walk us through who the major players are,
• 3:04
  Speaker 1: the major aluminium players in the region.
• 3:07
  Speaker 2: Yeah, so of course we have the UAE, and we
• 3:10
  Speaker 2: also have a Baharin and Cutter as well.
• 3:13
  Speaker 3: I mean, so these are the big three so to speak.
• 3:17
  Speaker 2: The UAE, for instance, that produces about two point five
• 3:21
  Speaker 2: million tons of aluminum let's say per year, twenty.
• 3:25
  Speaker 3: Twenty five figures.
• 3:27
  Speaker 2: Then if you look at Baharin, Bahrain produces about one
• 3:30
  Speaker 2: point five one point six a million tons, and then
• 3:33
  Speaker 2: also if you look at Cuttor culture produces about half
• 3:36
  Speaker 2: a million tons or so. I mean, so the region. Overall,
• 3:39
  Speaker 2: if you combine all of the aluminum production, it's about
• 3:43
  Speaker 2: we could say, ten percent ninety ten percent of global
• 3:46
  Speaker 2: aluminum production, which is a major non Chinese source of
• 3:51
  Speaker 2: aluminum production, because China dominates the market about sixty percent
• 3:55
  Speaker 2: or so. So when you're looking at, let's say, countries
• 3:58
  Speaker 2: that we're attempting to reduce their reliance upon China. So
• 4:02
  Speaker 2: if you look at the US in particular, and to
• 4:05
  Speaker 2: a certain degree by the EU, both countries respectively imported
• 4:09
  Speaker 2: around twenty percent of their aluminum from the Golf region.
• 4:13
  Speaker 2: So it's absolutely essentral, we could say for the global
• 4:15
  Speaker 2: economy and also for countries that we're attempting to diversify
• 4:20
  Speaker 2: as well from Chinese dominance in the market.
• 4:25
  Speaker 1: As you've just said, over the past decade, the Middle
• 4:27
  Speaker 1: East has become a major aluminum production hub, accounting for
• 4:30
  Speaker 1: around nine percent of global aluminium production. The metal is
• 4:34
  Speaker 1: essential for construction, transport, and renewable energy. But they Iran
• 4:39
  Speaker 1: war has already significantly disrupted production and exports. Justin what
• 4:45
  Speaker 1: impact could these attacks have on the global supply of aluminum.
• 4:51
  Speaker 2: Oh, well, I mean, we're already starting to see how
• 4:54
  Speaker 2: the global price of aluminum has been escalating. I mean,
• 4:58
  Speaker 2: so aluminium is essential for nearly everything that we can
• 5:03
  Speaker 2: think of. Even myself, my glasses have a very high
• 5:06
  Speaker 2: component of aluminum. So what we will see is that
• 5:09
  Speaker 2: this will ripple through the entire global economy. I mean,
• 5:13
  Speaker 2: so on one hand, you see the direct strikes at
• 5:15
  Speaker 2: of course the oil gas sector in the region, so
• 5:18
  Speaker 2: we've seen supply, a supply coming offline, and then also
• 5:21
  Speaker 2: of course shipping. I mean, so there has been an
• 5:25
  Speaker 2: enormous amount of oil and gas that hasn't been able
• 5:27
  Speaker 2: to transit the Strait, perhaps about ten million barrels per
• 5:31
  Speaker 2: day if we consider the bypass capacity in the UAE
• 5:33
  Speaker 2: and also Saudi Arabia. So we're seeing mutually reinforcing impacts
• 5:39
  Speaker 2: that will ripple through the global economy. On one hand,
• 5:42
  Speaker 2: the inputs that are necessary in order to be able
• 5:44
  Speaker 2: to produce the commodities that we need daily, and then
• 5:48
  Speaker 2: also the transport for these commodities, and then as well
• 5:52
  Speaker 2: the commodities themselves.
• 5:54
  Speaker 3: So it's just going to have a very.
• 5:57
  Speaker 2: Dynamic effect and it's going to put inflationary press throughout
• 6:00
  Speaker 2: the entire global economy. And this is one thing actually
• 6:03
  Speaker 2: we need to consider Iran is not just focusing on
• 6:10
  Speaker 2: military targets and of course looking at the oil gas sector,
• 6:15
  Speaker 2: but it's also exporting inflation. So that's one thing that
• 6:19
  Speaker 2: we really have to understand about Iranian strategic thinking, is
• 6:22
  Speaker 2: that they want to export inflation throughout the global economy,
• 6:25
  Speaker 2: and in particular to harm the interests of the countries
• 6:28
  Speaker 2: that are participating, of course in the conflict, and then
• 6:32
  Speaker 2: also to put pressure on countries that they believe will
• 6:36
  Speaker 2: be able to influence the US in Israel to implement
• 6:41
  Speaker 2: some type of ceasefire.
• 6:43
  Speaker 1: So justin your glasses have aluminum, remind us what else
• 6:47
  Speaker 1: do we use aluminium in our daily lives.
• 6:51
  Speaker 3: Basically everywhere?
• 6:52
  Speaker 2: For instance, one of the most common goods, of course
• 6:55
  Speaker 2: are beverage containers for instance, for our soda and what
• 6:59
  Speaker 2: have you. And then also if you look in the
• 7:01
  Speaker 2: kitchen pots and pans, if you look outside of your
• 7:05
  Speaker 2: home or apartment, look at the roofs, for instance, you
• 7:09
  Speaker 2: can also see the aluminum siding. If you look at
• 7:14
  Speaker 2: even cars automobiles have a very significant proportion of their
• 7:19
  Speaker 2: components are manufactured by aluminum or utilizing aluminium. In addition,
• 7:24
  Speaker 2: you can see that aluminium is utilized in a defensive industry,
• 7:28
  Speaker 2: so armament manufacturing as well, so missiles, drones, satellites.
• 7:33
  Speaker 3: And what have you.
• 7:34
  Speaker 2: I mean, so aluminum, you can say, touches nearly every
• 7:37
  Speaker 2: single facet of modern life.
• 7:41
  Speaker 1: And aluminium is important for the renewable sector, is that right?
• 7:45
  Speaker 3: Essential? Absolutely essential?
• 7:47
  Speaker 1: For how could you talk about that a little bit?
• 7:51
  Speaker 3: Energy sector? Aluminum is sure?
• 7:54
  Speaker 2: Absolutely so, I mean, aluminium is necessary for the solar industry.
• 7:58
  Speaker 2: So for instance, if you look at the photo voltaic
• 8:01
  Speaker 2: material panels, so aluminium is quite in a significant part.
• 8:05
  Speaker 3: It is one of the most critical.
• 8:06
  Speaker 2: Parts actually if you look at the manufacturer of PV panels.
• 8:11
  Speaker 2: And then also if you look at, for instance, the
• 8:13
  Speaker 2: wind energy industry, so turbines, blades, so on, quite essential.
• 8:19
  Speaker 2: And then and there are also other components of the
• 8:24
  Speaker 2: renewable energy sector where aluminum is necessary in order to produce.
• 8:28
  Speaker 2: So if you look, if we zoom out and look
• 8:30
  Speaker 2: at the big picture, one consequence of this war is
• 8:36
  Speaker 2: that many countries are going to be pursuing much more
• 8:39
  Speaker 2: aggressively their investments in decarbonization. Of course, so renewable energy overall,
• 8:47
  Speaker 2: also energy efficiency let's say programs. But what we see
• 8:52
  Speaker 2: is that with the fact that aluminium is needed for
• 8:56
  Speaker 2: so much of the renewable energy sector, this is going.
• 8:59
  Speaker 3: To raise costs as well.
• 9:01
  Speaker 2: So the very tool that countries are going to be
• 9:04
  Speaker 2: pursuing in order to reduce their alliance on having a
• 9:07
  Speaker 2: future event such as this, that we're going to see
• 9:11
  Speaker 2: cost skyrocketing as well.
• 9:14
  Speaker 1: Now, the IRGC claims these aluminium plants will link to
• 9:17
  Speaker 1: the US military. How legitimate is this claim and could
• 9:21
  Speaker 1: you help us understand how they could be of use
• 9:23
  Speaker 1: to the US military.
• 9:26
  Speaker 2: Well, I mean the claim is that they are dual
• 9:30
  Speaker 2: use facilities.
• 9:32
  Speaker 3: Now what does dual use mean.
• 9:34
  Speaker 2: I mean, dual use means that there's a civilian and
• 9:36
  Speaker 2: a military dimension to that whatever particular good you're talking about.
• 9:41
  Speaker 2: But I mean it's dual used to the degree that
• 9:43
  Speaker 2: you can just use it for military and you can
• 9:45
  Speaker 2: also use it for civilian let's say, civilian manufacturers.
• 9:50
  Speaker 3: So I give you an example.
• 9:51
  Speaker 2: Rubber can be considered to be dual use because rubber
• 9:54
  Speaker 2: makes tires that let's say, jet fighters I need, and
• 9:58
  Speaker 2: also Humby's have you, but then also for civilian good.
• 10:05
  Speaker 3: So I mean there's not necessarily a direct.
• 10:07
  Speaker 2: Relationship between these facilities and the US military industrial complex.
• 10:12
  Speaker 2: Now that being said, there is by the US military
• 10:16
  Speaker 2: industrial complex does use aluminum, which is basically sourced from
• 10:20
  Speaker 2: the open market, and as I indicated earlier, about twenty
• 10:23
  Speaker 2: percent of US imports come from the Golf region. I mean, so,
• 10:26
  Speaker 2: I mean, if we want to stretch the analysis, then yes,
• 10:29
  Speaker 2: you could say that aluminum which is produced and exported
• 10:33
  Speaker 2: from the Golf Region does in certain ways end up
• 10:36
  Speaker 2: in USR armaments production, but there is no direct linkage.
• 10:41
  Speaker 2: And then in addition to that, I mean, there haven't
• 10:45
  Speaker 2: appeared to be any type of covert or classified security linkages,
• 10:50
  Speaker 2: direct security linkages between the US, Israel and then these
• 10:54
  Speaker 2: aluminum facilities. So they're basically broadening what any type of
• 11:00
  Speaker 2: what any acceptable or rational definition of what do use means.
• 11:06
  Speaker 1: Thank you so much for all of your insights. Justin
• 11:08
  Speaker 1: Dargin of the Middle East Council on Global Affairs.
• 11:12
  Speaker 3: Sure pleasure. Thank you for having me.
• 11:15
  Speaker 1: How do you think a storage of aluminium supplies exacerbated
• 11:19
  Speaker 1: by the Iran war would impact your life? Let us
• 11:22
  Speaker 1: know in the comments. If you found this video informative,
• 11:25
  Speaker 1: please hit the like button, and if you haven't already,
• 11:28
  Speaker 1: don't forget to subscribe.