Everyone wants a piece of Uruguay

Hot off the presses… “Investors from Brazil, Argentina, Basque Province of Spain AND China flock to Uruguay.” So hot in fact, the article seems to be running on “Future Standard Time,” because despite the fact it is still October 7th in the US (where I’m writing from) and in Uruguay, its quite curious how the article was published at 12:39am UTC on October 8th…


You can click the highlighted article title above to access the article directly and read all the juicy details about how Uruguay seems to be the place to be.

Interestingly enough it is not because the country is swimming in resource wealth, a cheap labor sector or any of the cliché niches of a “developing country.” Rather because of its excellent record of political stability, the existence of a judicial system which is fair and honors the law and in my opinion… also because of its unique position next door to Brazil—Uruguay’s major economic partner at the moment.

Major investments highlighted in the article include:

Argentina: No particular companies mentioned, but the article describes how Argentina’s investment community has become “disenchanted with the unorthodox policies and uncertainties of their country they have crossed to Uruguay looking for investment opportunities.”

Brazil: In Sept 2009 Brazilian food processing giant, Marfrig acquired a 51% in the Uruguayan Tannery Zenda. Zenda produces upholstery for some of the most prestigious German car brands

Spain (Basque Province): Cultural heritage links many Uruguayans to “la madre patria” aka, the mother country of Spain, and specifically to the Basque region. Finance minister Alvaro García met with Basque entrepreneurs who expressed “a firm interest to invest in different sectors.”

China: In Sept 2009, a delegation of Uruguayan entrepreneurs attended China’s International Investment and Trade Fair and returned with news Chinese investors were interested in investing in Uruguay’s infrastructure sector; including its ports, energy sector and water treatment facilities.

October fire sale! Russian credit & Rubles accepted

Rigzone reported today that a Russian oil consortium would not have the pay the $1 billion usd Venezuela had previously requested as a down payment in order to partake in tapping Venezuela's Orinoco oil fields.

Instead, the Russian consortium will only have to pay $600 million usd. Sounds like a nice 40% bargain to this blogger. It's a nice deal if you ask me, which coincidentally comes on the heels of Venezuela's securing a large credit line from Russia to buy military equipment.

Orinoco Belt Regions - [Rigzone, 10-6-09]

According to this Dow Jones Newswire published by Rigzone,

The Chavez-led government has talked about plans for nearly $70 billion in oil investments over the coming years as this oil-rich nation seeks to ramp up dwindling production numbers and boost its sagging economy.

But so far, nearly all those plans are based only on memorandums of understanding, with no solid investment commitments from foreign oil companies.

Sounds like Venezuela is becoming increasingly hungry not only for foreign investment, but also to cement its relations with a geopolitical power like the Russian Federation.

Click here to read the newswire article from Rigzone, which I must admit does a far better job at detailing the situation than the concise, and slightly cynical analysis published here at China South America (CSA).

Strike continues at Shougang in Peru (update)

Reuters released their latest update on the ongoing strike occurring at Chinese owned iron ore mine, Shougang.

LIMA (Reuters) - Shougang Peru operations stopped by strike

Shougang Hierro Peru, the country's only iron ore producer, said on Monday a week-old strike at its mine had halted production and slowed mineral shipments.

The company's comments were its first since some 1,200 workers walked off the job more than a week ago in a bid to pressure Shougang (SHP.LM: Quote) to raise wages.

"Workers are on strike, therefore (the mine) is not producing," Raul Vera, Shougang's chief executive, told Reuters.

Click here to access the complete update on the situation, courtesy of Reuters

Chile, Copper and BHP Billiton

Newswire / CSA Commentary --

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Chile copper output rises 7.8%

Copper output in Chile, the world's biggest producer, rose 7.8% in August from a year earlier after state-owned Codelco and BHP Billiton boosted production, the government said.

Output increased to 459,823t from 426,689t a year earlier, the country's national statistics agency said in a statement distributed in Santiago today.

Click here to access the complete article

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Likewise, as this next article exhibits, BHP’s full year profit forecast may be substantially larger than previously thought…

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BHPB profit forecast raised 22% on copper, RBS says

BHPB's profit after tax may be US$10.68 billion in the year ending June 30, analysts led by Warren Edney said in a report dated yesterday. Profit may be US$14.9 billion in the year ending June 30, 2011, up 11% on an earlier forecast, he said.

Click here to access the complete article

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However, we’ll see how this all plays out when BHP’s workers meet next week to vote a potential strike

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BHPB Chile copper workers to vote on strike next week

BHP Billiton workers at the Spence copper mine in Chile will vote whether to go on strike next week after rejecting the company's latest pay offer, a union official said...

Workers may start a strike on October 3 for an indefinite period if they fail to get more of a pay increase, Mr Ramirez said yesterday...

Click here to access the complete article

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All while yet another big player in the copper sector ups their 2010 forecast of avg copper prices

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Chile's Sonami sees 2010 avg copper price $2.50/lb

Chile's second biggest mining association, Sonami, expects the average price of copper to rise by up to 19 percent next year, which might encourage the continuation of more copper projects in the South American nation, its president told Reuters on Monday.

The average copper price may rise to $2.50 per lb in 2010 from an average of $2.10 to $2.30 this year, Sonami's Alfredo Ovalle said in an interview at a forum in Santiago.

Click here to access the complete article

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RBS forecasts copper prices may hit a new record by 2013

Copper is likely to reach a new high by 2013 as the market moves into a deficit and further tightens in the coming years, RBS Global Banking & Markets said on Thursday.

"Copper remains our most favoured base metal," RBS said in a research note, in which it forecast an average cash copper price of $9,000 a tonne by 2013, a rise of more than 46% from the current cash MCU0 price on the London Metal Exchange. Benchmark three-month copper price MCU3 hit a record high of $8,940 a tonne in July 2008 and traded at $6,115 a tonne on Thursday.

"Copper's demand prospects are not among the best but we believe copper producers will have the most difficulty in keeping up with growing demand. We forecast an underlying market deficit by 2011 and that by 2013 it will be fast approaching pre-recession tightness," the bank said.

Copper, used extensively in construction, has doubled in price since the beginning of the year on the back of restocking from China, the world's top consumer of the metal and on expectations of a recovery in the global growth.

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Click here to access the full article from Mineweb