BHP Billiton investors sue in U.S. over Brazil dam disaster

Jonathan Stempel – Reuters, 02/25/2016

BHP Billiton Ltd was sued in the United States by investors who accused the Anglo-Australian mining company of fraudulently overstating its ability to manage safety risks prior to November’s fatal dam burst at a Brazilian mine it co-owned and operated.

In a complaint filed on Wednesday in the U.S. District Court in Manhattan, investors led by the Jackson County Employees’ Retirement System in Michigan said BHP inflated the price of its American depositary receipts by ignoring safety risks and overstating its commitment to safety before the disaster.

Four BHP officials were also sued, including Chief ExecutiveAndrew Mackenzie and Chairman Jac Nasser.

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Brazil’s Vale Draws $3 Billion of Credit as Asset Sales Falter

Reuters, 01/12/2016

Vale SA , the world’s largest iron ore producer, said on Tuesday it drew down $3 billion from a revolving credit line to pay debt due this quarter, a move that shines a light on its fragile finances amid low commodity prices and faltering asset sales.

Brazil-based Vale, which analysts expect to have a cash shortfall in 2016, said it took the action due to a delay in closing a deal announced at the end of 2014 to sell a stake in its Mozambique coal project to Japanese trader Mitsui & Co Ltd .

The closing is dependent on securing project financing for the coal mine and connecting rail and port, a hurdle the companies have been unable to clear so far. When the deal was announced, Vale said it was seeking up to $2.7 billion in project financing.

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Another huge and open iron mine is carved out of Brazil’s rain forest

Dom Phillips – The Washington Post, 04/13/2015

The line of trucks and four-wheel-drive pickups threw up clouds of red dust as it snaked up the hill on the wide dirt road. From the top, Brazilian rain forest stretched out into the distance. Before it, a vast quadrangle was being carved out of the slope by an army of machines, a scar of red earth in the green hills.

S11D, as this project is unceremoniously known, is an open-cast iron ore mine being dug out of this corner of the Brazilian Amazon, in the state of Para. Brazil’s mining giant, Vale, says the mine was designed for minimum environmental impact and maximum profitability. It is to start operating next year and by 2018 will be producing nearly 100 million tons annually of some of the purest iron ore in the world — a lifeblood for Brazil’s pallid economy.

But environmentalists argue that S11D could destroy rare savannah ecosystems found in two lakes on top of rich iron ore deposits. Dozens of caves that potentially contained evidence of ancient Amazon habitations have been lost. This grandiose $17 billion project is emblematic of a very contemporary, Brazilian dilemma: Can the country develop its rich natural resources without causing irreparable damage to its environment and history?

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China, Brazil close plane, finance, infrastructure deals

Anthony Boadle and Alonso Soto – Reuters, 7/17/2014

China and Brazil sealed their expanding commercial partnership on Thursday with a $5 billion credit line for Brazilian miner Vale and the purchase of 60 passenger jets from Brazilian planemaker Embraer.

In a raft of energy, finance and industry accords signed before presidents Xi Jinping and Dilma Rousseff, the two nations agreed to join forces to build railways to help Brazil cut its infrastructure deficit and feed China’s appetite for commodities.

Trade between China and Brazil soared to $83.3 billion last year from $3.2 billion in 2002, with iron ore, soy and oil making up the bulk of Brazilian exports, making China the South American nation’s biggest trade partner.

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Brazil’s Vale rises on Chinese demand

Samantha Pearson – Financial Times, 11/07/2013

Vale, the world’s second-largest miner by volumes, posted its first quarterly profit increase in more than two years as China’s steelmakers replenish stocks and the company’s aggressive cost-cutting plan starts to pay off.

The Brazilian company said late on Wednesday that net income had more than doubled from $1.64bn, or 32 cents per share, in the same period last year to $3.5bn, or 68 cents per share, in the third quarter.

It marked the first year-on-year profit increase for the iron ore producer since the second quarter of 2011 and beat an average estimate from analysts of 60 cents per share, according to Bloomberg.

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Brazilian Indians block iron ore miner Vale’s Carajas railway

Reuters, 07/10/2013

Brazilian Indians seeking better public services blocked a key railway carrying iron ore from global miner Vale’s giant Carajas mine to port, the company said on Wednesday.

Vale did not say how much iron ore had been held up by the protests, which were not directed at the company. The railway, known as EFC, carries close to 100 million tonnes of iron ore a year, or nearly 10 percent of the world’s 1 billion tonnes of seaborne exports.

The line connects the Carajas mining complex in Brazil’s Amazonian state of Pará with the Port of Ponta da Madeira near São Luis, the Atlantic port capital of Maranhão state on Brazil’s Northeast coast.

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In Brazil, a reminder of emerging-market risks

Tim Gray – The New York Times, 07/06/2013

THE protests in Brazil last month were the latest vivid reminder of the perils of investing in emerging markets. Tens of thousands of demonstrators thronged the streets of São Paulo, Rio de Janeiro and other cities, incited partly by a rising cost of living and a slowing economy. Cars burned. Tear gas billowed. And the Brazilian stock market sank.

Yet Brazil was one of the investment darlings of the last decade — the “B” in the ballyhooed BRIC quartet that also included Russia, India and China. Brazil’s economy at times grew at a rate of more than 5 percent a year. Most years, its stock market rose by double digits — in 2009, it returned more than 100 percent. Millions of people moved from poverty into the middle class, and Brazilian companies, like the oil driller Petrobras and the mining concern Vale, attained international prominence.

So far this decade, though, the Brazilian stock market has been a bust. It has dropped by a cumulative 25.3 percent over the last three years, and it has dragged Latin America stock mutual funds down with it. In the first half of 2013, Latin America funds tracked by Morningstar lost almost 17 percent, on average. Over the last three years through June, they lost 4.6 percent a year, annualized. But over the much longer term, they have still fared the best among emerging-market regional funds tracked by Morningstar, returning 16.7 percent, annualized, over the last decade.

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Vale sees China slowdown blunted by Brazil Real depreciation

Juan Pablo Spinetto & Laurie Hays- Bloomberg, 06/17/2013

Vale SA (VALE5), Brazil’s largest exporter, said further local currency depreciation could counter cost rises and a slowdown in Chinese iron-ore demand as it seeks to regain market share from Rio Tinto Group and BHP Billiton Ltd. (BHP)

The real, the worst-performing emerging-market currency in the past three months, probably will weaken to about 2.40 from 2.15 per U.S. dollar, bolstering Brazil’s competitiveness, said Jose Carlos Martins, Vale’s executive director for ferrous and strategy. China’s iron-ore and steel demand growth is set to slow to about 5 percent from 10 percent in the first five months of the year, he said.

“The Brazilian currency will devalue further,” Martins, 63, said in a June 14 interview at the company’s Rio de Janeiro headquarters. “The slowdown in China is negative, devaluation is positive because not only our costs in dollars will be reduced but also investments will be lower.”

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Redeemers of a macho society

The Economist, 06/15/2013

RIO DE JANEIRO is proof that even nature’s most lavish blessings cannot guarantee success. Rio lost its position as Brazil’s political capital to Brasília in 1960 and its status as the country’s business capital to São Paulo over the following decades. Gang wars and poor infrastructure have battered its tourist industry. The 2016 Olympic games represent the city’s best chance of reversing decades of decline. But is it capable of seizing the chance? That question towers over Rio like the rhetorical equivalent of the statue of Christ the Redeemer.

The person who will do more than anybody else to answer it is the head of the Municipal Olympic Company, Maria Sílvia Bastos Marques. She has the perfect background to lead an organisation that straddles the public and private sectors: a former boss of a steel company and director of Brazil’s two biggest companies, Petrobras and Vale, she has also held numerous positions in local government and served as the first female director on the board of Brazil’s huge development bank, BNDES. And she has a ready answer to any question.

What about logistics? She points to a map that shows the dedicated bus lanes and metro lines that will bring the scattered population to the games. What about Rio’s Byzantine government (power is divided between federal, state and municipal government, and the armed forces own huge chunks of land in the city)? She seems to know everyone who matters. What about crime? She notes that this is not her responsibility but quotes figures to show that the new “pacification” police are doing a good job. Ms Bastos Marques says she wants the games to transform her native city, speeding up projects that have been on the books for years—such as a 30-year-old scheme to upgrade the port district—to lay the foundations for long-term growth.

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Brazil: eager to explore new frontiers in Africa

Ruth Costas – BBC Brasil, 06/11/2013

The government and some large Brazilian companies are betting on the opening of new frontiers in the African market.

In recent years, Brazil has increased its economic presence both in Lusophone Africa – mainly Angola and Mozambique – as in South Africa (considered to be one of the more “mature markets” in the region along with North African countries.)

Now, explained Ambassador Paulo Cordeiro, secretary-general of the Ministry of Foreign Affairs for Africa and the Middle East, one of the greatest challenges for Brazilian diplomacy is to create the right conditions so that a growing number of companies explore new investment opportunities in emerging African markets, such as Ethiopia, Nigeria, Sudan, Kenya, Guinea, Tanzania, Senegal and Ghana.

“These efforts are a big part of my work. We are committed to creating the right environment for this expansion to take place, and to convince Brazilian society that the African continent has many interesting opportunities to offer- and not only in Portuguese speaking countries,” said Lamb.

Official initiatives range from programs for military and technical cooperation to projects for expanding the financing of investments in the continent as well as efforts for political rapprochement.

These initiatives work alongside some large Brazilian companies that have been actively seeking out business opportunities in countries that until recently were synonymous with conflict and extreme poverty, interested primarily in opportunities in the infrastructure and natural resources sectors.

According to Cordeiro, the decision announced by President Dilma Rousseff to forgive $900 million dollars of African debt took place amidst these expansion plans.

Financing

In total, 12 countries will benefit from President Rousseff’s decision: Congo, Tanzania, Zambia, Senegal, Ivory Coast, Democratic Republic of Congo, Gabon, Guinea, Mauritania, Sudan, Sao Tome and Principe and Guinea-Bissau –of which only the last two classify as Lusophone nations.

Until recently, Brazilian state-owned banks could not finance investments and trade flows to these countries because of their unsettled debts with Brazil.

This measure will allow the Brazilian Development Bank (BNDES) and Banco do Brasil to finance Brazilian exports as well as investments and infrastructure projects carried out by Brazilian companies (today, almost all BNDES loans for projects in Africa go to Mozambique and Angola.)

“The demand for investment and cooperation called for by African countries is immense,” said Cordeiro. “Tanzania wants Brazilian companies to help in the hydroelectric sector, for example, and Gabon seeks investments in oil. We also have many Brazilian companies interested in participating in this market – but we are still lacking the means to finance such projects.”

According to the Ambassador, in order to solve this problem, proposals were made to BNDES to create a board responsible solely for loans to Africa and Latin America.

“We need to think of appropriate financial instruments for these projects in Africa and understand what their guarantees could be,” stated Cordeiro.

Cooperation

Cordeiro points out that in the field of technical cooperation, the Brazilian Agricultural Research Corporation (Embrapa) already has projects in several African Countries – among them Senegal, Mali and Ghana. In addition, in terms of military exchange, there has been significant Brazilian participation in the training of Namibia’s Navy.

In the past three months, Dilma made three trips to Africa. Besides her trip to Ethiopia where she participated in the celebration of the African Union’s anniversary, she also went to Guinea Bissau in February to attend the third South America-Africa Summit and to Nigeria to meet with President Goodluck Jonathan.

In March, she attended the 5th BRICs summit in South Africa, taking the opportunity to also meet with leaders of other African countries.

Moreover, according to the Foreign Ministry (Itamaraty,) in recent years efforts have been made to expand the infrastructure of various Brazilian embassies in Africa, which more than doubled over the last decade, allowing Brazil to rank fourth, along with Russia, in terms of countries with the largest representation in the Continent (behind the United States, China and France.)

Translated from Portuguese

Original article here