Chinese presence in Brazil
Chinese firms are increasingly looking to build their own mining operations in Brazil, national mining association Ibram's R&D and economic data manager Antonio Lannes told BNamericas.
Up to now, Chinese firms have been involved in JVs and partnerships with local companies but Ibram recently received a Chinese delegation interested in local regulations, taxes and environmental licensing processes to begin new projects rather than buying existing operations, Lannes said.
The increase in China's foreign exchange reserves has prompted the country to look at international assets to ensure mineral and food supply, according to Lannes.
China's Wuhan Iron and Steel (Wisco), for example, acquired a 21.5% stake in Brazilian iron ore miner MMX (Bovespa: MMXM3) this year for 739mn reais (US$422mn). MMX has agreed to sell to Wisco at least 50% of the company's output from Serra Azul, part of the miner's Sudeste system. Iron ore shipments could reach 17Mt/y once the system is fully ramped up.
The acquisition of Brazilian iron ore and pig iron producer Itaminas by Chinese consortium ECE is another instance of Chinese involvement in local companies. Itaminas' iron ore mine in Minas Gerais state's Sarzedo has estimated reserves of 1.3Bt and ECE acquired the firm for US$1.2bn. The mine currently produces 3Mt/y of iron ore but this could be increased to 25Mt/y, according to press reports.
China consumes 1.3Bt/y of iron ore but it extracts no more than 350Mt/y. In 2009, China absorbed 56.4% of Brazil's iron ore production, according to Ibram's statistics.
MARKET SHARE
Chinese interest in building own operations would not pose a threat to local companies, Lannes said. Currently, the Chinese share in Brazil's iron ore output is 4-5Mt/y, a little above 1% of the annual iron ore production of 350Mt.
Over the next five years, Brazil is expected to double iron ore output to 700Mt/y and, even if Chinese companies are responsible for 15-20Mt/y of that production, it would still only account for 2-3% of national output, according to the expert.
Lannes is optimistic about foreign investment in general, and not just from China. "Investments in iron ore mining also involve considerable infrastructure projects to handle new production," he said Ibram is forecasting that US$62bn will be invested in the Brazilian mining industry through 2014. Of the total, 63.3% will be directed towards iron ore.
This year, mineral production is expected to generate US$35bn, of which US$20bn will be from iron ore mining.
Toronto, Canada, October 25, 2010 - Colossus Minerals Inc. (TSX: CSI) (the “Company” or “Colossus”) announced today that it has entered into an agreement with a syndicate of underwriters led by GMP Securities L.P. (the “Underwriters”). The Underwriters have agreed to purchase, on a bought deal basis, 7,300,000 common shares
(the “Common Shares”) of the Company, at a price of C$8.25 per Common Share (the “Offering Price”) for aggregate gross proceeds to Colossus of C$60,225,000 (the "Offering"). The Company has agreed to grant the Underwriters an over-allotment option to purchase up to an additional 1,095,000 Common Shares at the Offering Price, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the Offering. If this option is exercised in full, an additional C$9,033,750 will be raised pursuant to the Offering and the aggregate gross proceeds of the Offering will be C$69,258,750. The Common Shares will be offered by way of a short form prospectus to be filed in all of the provinces of Canada, except Quebec.
The net proceeds are intended to be used to fund expenditures on the Serra Pelada project and other exploration activities and for general working capital and corporate purposes. The Offering is expected to close on or about November 16, 2010 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the
Toronto Stock Exchange and the applicable securities regulatory authorities.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
Source: http://www.infomine.com/index/pr/Pa943089.PDF
Up to now, Chinese firms have been involved in JVs and partnerships with local companies but Ibram recently received a Chinese delegation interested in local regulations, taxes and environmental licensing processes to begin new projects rather than buying existing operations, Lannes said.
The increase in China's foreign exchange reserves has prompted the country to look at international assets to ensure mineral and food supply, according to Lannes.
China's Wuhan Iron and Steel (Wisco), for example, acquired a 21.5% stake in Brazilian iron ore miner MMX (Bovespa: MMXM3) this year for 739mn reais (US$422mn). MMX has agreed to sell to Wisco at least 50% of the company's output from Serra Azul, part of the miner's Sudeste system. Iron ore shipments could reach 17Mt/y once the system is fully ramped up.
The acquisition of Brazilian iron ore and pig iron producer Itaminas by Chinese consortium ECE is another instance of Chinese involvement in local companies. Itaminas' iron ore mine in Minas Gerais state's Sarzedo has estimated reserves of 1.3Bt and ECE acquired the firm for US$1.2bn. The mine currently produces 3Mt/y of iron ore but this could be increased to 25Mt/y, according to press reports.
China consumes 1.3Bt/y of iron ore but it extracts no more than 350Mt/y. In 2009, China absorbed 56.4% of Brazil's iron ore production, according to Ibram's statistics.
MARKET SHARE
Chinese interest in building own operations would not pose a threat to local companies, Lannes said. Currently, the Chinese share in Brazil's iron ore output is 4-5Mt/y, a little above 1% of the annual iron ore production of 350Mt.
Over the next five years, Brazil is expected to double iron ore output to 700Mt/y and, even if Chinese companies are responsible for 15-20Mt/y of that production, it would still only account for 2-3% of national output, according to the expert.
Lannes is optimistic about foreign investment in general, and not just from China. "Investments in iron ore mining also involve considerable infrastructure projects to handle new production," he said Ibram is forecasting that US$62bn will be invested in the Brazilian mining industry through 2014. Of the total, 63.3% will be directed towards iron ore.
This year, mineral production is expected to generate US$35bn, of which US$20bn will be from iron ore mining.
Colossus Minerals Inc. Announces C$60,225,000 Bought Deal Financing
Toronto, Canada, October 25, 2010 - Colossus Minerals Inc. (TSX: CSI) (the “Company” or “Colossus”) announced today that it has entered into an agreement with a syndicate of underwriters led by GMP Securities L.P. (the “Underwriters”). The Underwriters have agreed to purchase, on a bought deal basis, 7,300,000 common shares
(the “Common Shares”) of the Company, at a price of C$8.25 per Common Share (the “Offering Price”) for aggregate gross proceeds to Colossus of C$60,225,000 (the "Offering"). The Company has agreed to grant the Underwriters an over-allotment option to purchase up to an additional 1,095,000 Common Shares at the Offering Price, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the Offering. If this option is exercised in full, an additional C$9,033,750 will be raised pursuant to the Offering and the aggregate gross proceeds of the Offering will be C$69,258,750. The Common Shares will be offered by way of a short form prospectus to be filed in all of the provinces of Canada, except Quebec.
The net proceeds are intended to be used to fund expenditures on the Serra Pelada project and other exploration activities and for general working capital and corporate purposes. The Offering is expected to close on or about November 16, 2010 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the
Toronto Stock Exchange and the applicable securities regulatory authorities.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
Source: http://www.infomine.com/index/pr/Pa943089.PDF
