Wednesday, February 09, 2011

Brazil plans 270 billion dollars investment in the mining sector

The Minister of Mines and Energy Edison Lobao announced on 8 february that Brazil would invest 270 billion dollars in the next two decades in the mining sector and triple the production of gold, iron and copper by 2030. As part of the new policy, the government will discourage exports of crude raw materials and encourage value addition. The plan document notes the concerns on excessive dependence on China and calls for diversification of markets. There will also be reforms in the mining laws.

The targets of production increase from 2008 to 2030 in million tons are as follows:

Iron ore 351 to 1098

Gold 55 to 200 ( not in million, of course)

Copper 216 to 1000

Alumina 7.8 to 25.7

Aluminium 1.6 to 3.2

Raw Steel 33.7 to 116

Nickel 25000 tons to 132,000 tons

The Mining investment plan is the third in the series of mega investment plans of Brazil. The first was the 220 billion dollar investment in petroleum sector and the second, an equal amount of investment in infrastructure including for the 2014 World Cup and the 2016 Olympics.

Indian companies should target Brazil for projects and also for export of mining equipments and machinery.

Besides Brazil, they should focus on Peru, Colombia, Chile, Boilivia and Argentina which are also rich in mineral resources. Jindal, Aditya Birla group and Essar have already made entry into the region.

This week, Tega Industries Limited of Kolkatta announced acquisition of a Chilean company Acotec S.A. which is a $35 Mn company providing products and solutions for abrasion, corrosion and fluid transportation systems to the mining industry in Chile, Peru, Argentina and Bolivia.
Tega Industries specialises in mineral processing and material handling technlogies and equipments for the mining industry. It has global presence including in Brazil, USA, Australia and South Africa.

Thursday, February 03, 2011

Will 2011 be the dawn of the Latin American decade ?

¨Will 2011 be the dawn of the Latin American decade ?¨ is the title of the webcast by Standard and Poors on 11 January 2011.

Joydeep Mukherji, Senior Director and Lisa Schineller, Director of Sovereign Ratings and Latin American Economist of Standard & Poor's Ratings Services have been interviewed in this 50 minute show

I liked it. My answer to the title of the show is,
Yes.. this is going to be the growth decade for the region, which had experienced a lost decade in the eighties.
I agree with the observations and conclusions of Joydeep, who despite his pasioncito ( little passion) for the region, is objective and balanced. I tend to see the half full..given my unbound passion.

Joydeep has said, ¨the elections in latin america have become boring ¨. This is great news. Boring means no turn to the opposite direction or drastic changes in policies when governments change. There is a growing consensus on major policies even when governments are formed by parties of different ideologies.

Following up on Joydeep´s statement I would say that even the economies of the region are becoming boring. No more hyperinflation, debt overburden or exchange rate volatility. No booms and busts. No more adventurous or experimental economic policies or IMF rescue operations. Macroeconomic indicators have become more stable and predictable. The policy makers are more disciplined and pragmatic ( exceptions are there !!). I like this boring situation and expect to see the economies becoming even more boring.

Here is the link to the webcast