Colombia’s Santos meets Lula da Silva in his first overseas visit

Colombian president Juan Manuel Santos arrived Tuesday in Brazil for an official two-day state visit that begins Wednesday with a meeting with President Lula da Silva to address a regional political agenda and strengthen bilateral trade.
Santos will be the first leader to be received at the refurbished Planalto Palace, seat of the Executive that underwent 18 months of maintenance and upgrading. He arrived in Brasilia with Foreign Affairs minister Maria Angela Holguin and Sergio Díaz-Granados head of Trade, Industry and Tourism.
Following the analysis of the regional agenda, and the conflicting situation with Venezuela, so far under control, the two leaders will talk about bilateral trade that in 2009 reached 2.7 billion US dollars according to Brazilian sources.
Even when Colombian exports soared 101%, the trade surplus still favours Brazil and one of the purposes of the visit is to try to level the volume of exchange by promoting investment in export companies.
Santos is also scheduled to visit Congress officials, members of the Supreme Court as well as a private meeting with Defence minister Nelson Jobim, an old acquaintance since the time the Colombian leader was Defence minister.
A meeting has also been arranged with Dilma Rousseff the presidential candidate for the ruling coalition, who besides is comfortably leading in public opinion polls for ballot day October 3.
On Thursday in Sao Paulo, Santos interviews Jose Serra, former governor of Sao Paulo and the main opposition presidential contender, and the Green Party presidential candidate Marina Silva who figures with 9% vote intention.
Before concluding his visit Santos meets with the board of the powerful Sao Paulo Federation of Industries, FIESP, where he plans to set the foundations for closer links with Colombian industry.
Colombia has grown steadily since former president Alvaro Uribe took office in 2002 and the country has attracted billions of dollars in investments.
“This is the first overseas visit since taking office and we have chosen Brazil because of the growing significance of the country”, and President Lula da Silva’s insistence in inviting him personally to visit Brazil, admitted Santos.
Minister Holguin described Brazil as “a strategic” partner for Colombia and the event will emphasize political dialogue and promote trade.
Another issue which does not figure in the official agenda released to the media is security along the hundreds of kilometres of common border shared by both countries.
Colombia’s Chief of Joint Staff Admiral Edgar Cely in recent statements said that “border security” is the responsibility of all and anticipated both leaders would agree on a common strategy to end with the “guerrilla corridors”, plus consider technical cooperation and exchanges to improve living conditions for people living in those areas.
Source - Mercopress

Lula da Silva’s double challenge as Mercosur chair

Consolidating Mercosur as an “undisputed irreversible” integrated block will be Brazilian president Lula da Silva challenge as the pro-tempore chair of the group in the last leg of his eight years in office.
The task must be accomplished in the last five months of his presidency, which ends next January, plus ensuring that his successor as leader of Latinamerica’s largest economy is effectively convinced of Mercosur merits.
“We must keep advancing so that Mercosur is something nobody can have doubts about: that we are convinced-friends in the construction of a political, economic, social and cultural block”, said Lula da Silva on taking the group’s chair from Argentine president Cristina Fernandez de Kirchner this Tuesday.
Following on the San Juan summit success which ended with years of Mercosur frustrations and paralysis anticipating a strong customs union, Lula da Silva and his acknowledged international prestige, can now concentrate on consolidating the integration process.
Argentina’s Cristina Kirchner and Uruguay’s Jose Mujica implicitly supported the role Lula da Silva will be playing in the coming months.
Mrs. Kirchner underlined that Lula da Silva together with her husband and former president Nestor Kirchner were the architects of the re-launching of Mercosur, while Uruguay’s Mujica praised the attitude of the block’s senior members leaders who left behind “chauvinism” and “the idea that each of them was the centre of the world” and opted for a full-hearted integration.
Lula da Silva anticipated that one of his major challenges would be to reach a trade and political association agreement between Mercosur and the European Union, a task which he admitted will force him to overcome the reticence of France that is contrary to any deals regarding the more competitive South American agriculture.
Source - Mercopress

Local investors need to reassess mining risks - Licancabur CEO - Chile

Chilean investors need to change how they assess financial risks associated with mining activities to ensure the successful development of a segment on the local stock exchange for the sector, the CEO of local small mining company Minera Licancabur, Juan Orellana, told BNamericas.
The listing of mining companies' shares or new projects for financing on the local bourse is possible, but local investors need to understand that mining is not as risky in terms of future returns as they think it is.

Parex "bias" for 2011 capex up on this year - Colombia, Trinidad & Tobago

Calgary-based Parex Resources (TSX-V: PXT) could increase 2011 capex plans following a successful drilling campaign in Colombia and Trinidad this year, according to company CEO Wayne Foo.
Parex this year plans to drill eight wells in Colombia and three in Trinidad.
"We're obviously pleased by what we've seen to date and if we were going to go either up or down, I think our bias would be towards up in order to incorporate development capital," said Foo, when asked about next year's capex plans.

Alcoa prices US$1bn debt offering

US-based aluminum producer Alcoa (NYSE: AA) has priced its public offering of US$1bn of notes, the company said in a statement.
The interest rate has been set at 6.150% and the notes are due August 15, 2020. The offering is expected to close by August 3, the statement said.
Alcoa expects to receive aggregate net proceeds of approximately US$993mn, after deducting underwriting discounts and estimated offering expenses.
The company intends to use the net proceeds together with cash on hand, if necessary, to fund the purchase price of its 6.50% notes due 2011, 6.00% notes due 2012 and 5.375% notes due 2013 that are tendered and accepted for purchase in its tender offers launched on Monday, the statement said.
Earlier this month, Alcoa announced Q2 net income of US$136mn, compared to a net loss of US$454mn year-on-year on higher revenues and average prices.
Revenues jumped to US$5.19bn from US$4.24bn in the second quarter of 2009.
A drop in aluminum production to 893,000t from 906,000t was offset by an increase in the average realized price to US$2,309/t, compared to US$1,667/t.
In Latin America and the Caribbean, Alcoa has operations in Chile, Peru, Argentina, Colombia, Jamaica and Brazil, the last of which represents the bulk of its earnings from the region.

Votorantim Siderurgia plans to become industry leader in the Americas

Votorantim Siderurgia, the steel arm of Brazilian conglomerate Grupo Votorantim, is aiming to be a leading player - both in terms of quality and cost - in long steel production in the Americas, according to company director Ricardo Henriques Leal.
As part of its growth strategy, the company is also planning to increase output to 3Mt/y from the current 2.53Mt/y. The increase will be achieved through improvements in productivity and developments at its existing units in South America, Leal said.
Votorantim Siderurgia's operations in Brazil comprise a plant in Barra Mansa and another in Resende, both in Rio de Janeiro state. It also has units in Argentina and Colombia.
The company also plans to increase long steel exports from Brazil as part of its growth strategy. Currently, exports accounts for 5% of Votorantim Siderurgia's sales, according to Leal.
In 2009, the company's revenues were 2.2bn reais (US$1.25bn), equivalent to 10% of the group's sales.
PRODUCTION
In Brazil, production capacity is 1Mt/y at Resende and 800,000t/y at Barra Mansa.
At Argentine subsidiary Acerbrag, Votorantim Siderurgia produces 330,000t/y, while Acerias Paz Del Rio in Colombia produces 400,000t/y. In Colombia, Votorantim also has iron ore and coal mining operations, supplying 100% of the raw material for its local steel plant.
Output will be increased by 20% in both Argentina and Colombia, according to Leal. "The hike in production capacity will be achieved through improvements at the current units," Leal told reporters during the Latin American Iron & Steel Trends conference, held in Rio de Janeiro last week.
Leal's outlook for the rest of the year in the Brazilian steel sector is optimistic. "The market has grown consistently this year compared to 2009 and I think that growth level will be maintained," he said.
By Fernanda De Biagio

Stocks in steel distribution sector at record 1.2Mt - Brazil

Brazil's steel distribution sector increased purchases by 85% to 2.35Mt in the first six months of this year, leading to a record stock level of 1.2Mt, according to the president of local steel distributor Frefer, Christiano da Cunha Freire.
The inventory is enough to supply the domestic market for 3.6 months, compared with a historical average of 2.7 months.
Through 2008, stocks stood at an average of 800,000t.
However, purchases from mills have already experienced a significant drop and stocks are expected to return to more favorable levels over the next three months, according to the executive.
From January to June, distribution sales totaled 1.97Mt, up 28% year-on-year. For the full year, national steel distributors association Inda is forecasting sales to reach 4Mt compared to 3.39Mt in 2009.
While sales have been increasing over the last few months, the pace has not been as fast as in Q1 or in the last quarter of 2009, Freire said at the Latin American Iron & Steel Trends conference, held in Rio de Janeiro last week. The executive also said that while the market remains strong, it has not fully returned to pre-crisis levels yet.
With Brazilian steelmakers increasing their prices and end users calling for decreases, the distribution sector will face an imbalance through the end of the year. However, Freire expects prices in the distribution chain to remain steady in H2At the same time, some distributors have been turning to the international market where prices are approximately 15% less, Freire said. Imports have been increasing and currently supply approximately 25% of local demand.
By Fernanda De Biagio