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Brazil Invests $8 Billion in Argentina in 6 Years

On August 8, 2011, In a-bric, foreign investment, by InvestBA
Vale projeto de extração de potássio na Argentina

Vale's multibillion dollar Rio Colorado mining project involves the construction of a port and railroad.

Brazilian direct investment in Argentina has skyrocketed in recent years, and the total amount invested and spread across industries increases with each passing year, according to a new report from the Brazilian Embassy in Buenos Aires.

Brazil direct investment in Argentina totalled US$11.19 billion during the 14.5 years between 1997 and the first half of 2011. Most impressively has been the explosion in spending in just the past six years as US$8 billion of the $11.19 billion total (71%) was invested just since 2005.

Among the factors attracting Brazilian investment in Argentina, DCI credits Argentina’s 9% annual growth rate, the strength of the real relative to the peso (R$1 = ARS 2.6), the opportunity to circumvent trade barriers, and the chance to meet local demand in Argentina while exporting to Brazil and other emerging markets.

The growing diversity in Brazilian investment is evident in new commitments cited by the Brazilian Embassy: Grupo Moura‘s $30 million battery plant, Randon‘s $8 million trailer factory upgrade and Vale‘s multibillion dollar Rio Colorado potash mining project in Mendoza Province including the construction of a new port and railroad to transport potash to the Atlantic Ocean.  (Vale was one of the 10 Latin American Growth Stocks to Watch profiled earlier this year.)

(Full Story in Portuguese)

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Slideshow: 10 Latin American Growth Stocks

On March 22, 2011, In a-bric, competitiveness, energy & agriculture, foreign investment, franchises, real estate, technology, by InvestBA



Seeking Alpha recently chose 10 Stocks to Profit from Latin American Growth together with an analysis of Latin America’s resilience and rebound amid the global chaos of the last few years. For such a small sample size, the picks were a good representation of six countries (Argentina, Brazil, Chile, Colombia, Mexico, Peru) and six industries (banking, beverages, housing, mining, oil & utilities).

Of all countries, Brazil had the most companies on the list (3) including the two market cap giants, mining giant Vale S.A. ($173.84B) and banking powerhouse Itau Unibanco ($99.87B). In terms of performance, it’s worth noting Vale just posted the largest annual net profit in the history of the mining industry: US$17.3 billion, and according to Interbrand, Itau is the most valuable brand in Brazil (US$12.5B). We’ve documented Itau Unibanco’s growing market share here in Argentina.

In terms of appealing to foreign investors online, the Brazilian companies are destroying their regional rivals. Brazilian Investor Relations sites like Vale are written in perfect English, feature social media links and full-color features on company sustainability efforts. In contrast, an Argentine site like Pampa has no social media, an empty press room and myriad bad translations (Investor Relation, one thousand million pesos, etc.). Where have we seen this before?

For more information about investment opportunities in Argentina, download IncomeBA and the new issue of InvestBA Privada.

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A Closer Look at Argentina’s Silver Lining…Silver Mining

On June 2, 2010, In energy & agriculture, foreign investment, real estate, by InvestBA
Pan American Silver Mine in Argentina

Argentine workers enter the Melissa Underground Mine operated by Pan American Silver Corp.

Whether its G. Gordon Liddy or the guy who Matt Damon beat up in Good Will Hunting, you can’t turn on the TV without being bombarded by gold pitchmen. And while yearly gold charts look like the left side of a mountain, the rise in silver prices over the past two years is equally impressive.

Marc Davis of BNW Newswire says the impetus for greater silver exploration is definitely there, but we’re just not seeing it worldwide…with one notable exception. “Argentina posted a 55% jump in silver output in 2009 to 15.5 million ounces over the previous year.

One of the world’s few remaining stable democracies that is mineral-rich but underdeveloped, this geographically large Latin American nation is set to continue to ramp-up its output in the coming years,” writes Davis.

He says the major players in the region are three Vancouver-based companies: Silver Standard Resources (NASDAQ: SSRI), Pan American Silver Corp. (NASDAQ: PAAS), Extorre Gold Mines (TSX: XG) and Australia’s Andean Resources (TSX: AND).

Davis explains why silver is a good play going forward: “A number of key 21st century applications such as solar panels and flat screen television panels are forecast to contribute strongly to heightened demand. Furthermore, the marketplace for semiconductors, which are used in an array of portable electronic devices and other high-tech applications, is experiencing explosive growth.” (Full story at Resource Investor)

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Tap That: Investors Score With Gold, Silver Mines in Argentina

On April 30, 2010, In a-bric, energy & agriculture, foreign investment, real estate, by InvestBA
casposo-mine

Foreign investors like Troy Resources are tapping abundant mineral deposits in San Juan Province.

Casposo, a gold and silver mine in Argentina’s San Juan province is on the fast track toward producing its first gold in September, less than a year after initial excavation commenced. The news was the highlight of Troy Resources (ASX:TRY) quarterly earnings call earlier today.

Australia-based Troy is an aggressive mid-tier gold producer with South American mining operations in Argentina and Brazil. Troy purchased the Casposo project in May 2009, delivered an encouraging resource estimate in July and received board approval to move forward in August.

While the company lowered full-year production estimates for their Brazilian project, Andorinhas, the progress at Casposo was described by CEO Paul Benson as “the highlight for this quarter.” According to Mining Weekly, “Troy estimated that the Casposo project hosted an indicated mineral resource of more than 2.3 million tons, grading at 5.4 grams/ton gold and 201.7 grams/ton silver.”

The company’s indicated resources for the mine are 414,600 oz gold and 15.3MM oz silver, and the block model above indicates the depth and quality of the resources at Casposo. Troy anticipates the project will produce its first gold in September, which is good timing considering the planned cessation of operations later this year at the company’s Australian mine, Sandstone.

For more information on investment opportunities in Argentina and Uruguay, download IncomeBA and the new issue of InvestBA Privada.

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British Trade Investment Director On Argentina & Competitiveness

On November 5, 2009, In a-bric, competitiveness, foreign investment, by InvestBA
U.K. Trade Executive Director Andrew Cahn was in Argentina as part of a 3-country tour.

U.K. Trade Executive Director Andrew Cahn was in Argentina as part of a 3-country tour.

Fresh off a tour of Argentina, Chile and Paraguay, the director of the U.K.’s export promotion office, U.K. Trade & Investment, sits down with La Nacion and engages in a bit of British diplomacy in describing which foreign markets he finds most attractive.

“China and India are absolutely critical in overall strategy,” says Andrew Cahn, “There are other emerging markets that are growing rapidly which offer more opportunities like Turkey, Vietnam and the United Arab Emirates.”

When it comes to Latin America, the Q&A probably doesn’t come as a surprise to groups like IDEA regarding Argentina’s global competitiveness vis-a-vis other Mercosur countries. “The big elephants are Brazil and Mexico, and we put more resources there, because they offer more opportunities,” explains Cahn, ” and Chile is growing rapidly and gives investors confidence.”

So where does that leave Argentina in the U.K. Trade equation? Well, 30 of the the U.K.’s Top 100 companies have Argentine offices, and there is significant British investment in mining, petroleum, gas, banking and pharmaceuticals. But Cahn says greater transparency and clear rules of the game are needed to put Argentina on the fast track to global competitiveness.

For more information about investment opportunities in Argentina, download InvestBA Privada.

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