Brazil’s Vale acquires Capim Branco from Suzano for BRL223 Million

Rogerio Jelmayer – Fox Business/Dow Jones Newswires, 03/14/2013

“Vale exercised its right and completed the acquisition of a 12.47% stake in Capim Branco I and II hydroelectric power plants from Suzano. As a consequence, Vale’s stake will reach 60.89% of Capim Branco I and II, which can generate 1,524 gigawatts hours of energy per year by the end of the concession in 2036,” Vale said in a statement.

From Vale’s perspective, the acquisition targets reduction of the cost of energy of its operations, while for Suzano, the sale represents its strategy to disinvest in noncore assets as part of its efforts to reduce debts.

Before the transaction, Suzano controlled Capim Branco Energia through a consortium with Minas Gerais-run power utility company Cemig SA (CIG, CIGC, CMIG4.BR) with a 21.1% stake, Vale with a 48.4% stake, and industrial conglomerate Votorantim, which has a 12.6% stake.

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Anaylsis: Brazil’s once-envied energy matrix a victim of “hubris”

Jeb Blount – Reuters, 01/07/2013

Just five years ago, Brazil‘s mostly “green” energy landscape was the envy of nations dependent on dirtier sources of power and the pride of a government that believed it was leading the country to economic superpower status.

Three-quarters of electricity came from renewable hydro power and the main automobile fuel was home-grown sugarcane ethanol. Plus, Brazil had just found massive oil fields off its coast, putting it on a path to become the world’s No. 3 oil producer after Russia and Saudi Arabia by 2020.

Today, the outlook is much darker. Oil output is falling, ethanol production has plunged, and fears have recently returned of electricity rationing that could further depress a stagnant economy and embarrass President Dilma Rousseff.

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Brazil grants building license for Amazon dam

Bradley Brooks – Associated Press/Forbes, 06/01/2011

The massive Belo Monte hydroelectric dam in the heart of the Amazon rain forest won approval from Brazil’s environmental protection agency on Wednesday, clearing the way for construction of a project fiercely opposed by environmentalists, indigenous activists and celebrities including film director James Cameron and rock star Sting.

The dam would be the world’s third largest, behind China’s Three Gorges dam and the Itaipu, which straddles the border of Brazil and Paraguay.

The consortium building Belo  Monte still must obtain an operating license before producing energy, but Wednesday’s decision allows for full-scale construction of an $11-billion project designed to produce 11,000 megawatts of electricity, more than 6 percent of Brazil’s energy needs.

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