Ecuador-China sign first contract for “Mega Mine”

Reuters reports — Ecuador signs first large-scale mining contract

QUITO, March 5 (Reuters) – Ecuador’s President Rafael Correa on Tuesday signed the country’s first ever large-scale mining contract, which calls for Chinese-owned Ecuacorriente to invest $1.4 billion in the El Mirador copper project.

Ecuador has no mining industry to speak of and Correa, a U.S. trained economist, is eager to attract investment to tap the country’s big copper, gold and silver deposits and diversify the economy from its dependency on oil exports.

Correa is trying to reap lofty benefits from miners and negotiations with Ecuacorriente and Canada’s Kinross, which plans to develop the Fruta del Norte gold project, have taken much longer than initially expected.

Rare question and answer Xinhua Exclusive on China- Latam relations

Thank you Xinhua News. Please click here to access the article from Xinhua News.

Yang Wanming, director-general of the the Department of Latin American and Caribbean Affairs of the Chinese Foreign Ministry, exchanged views with chinanews.com readers online on Tuesday afternoon.

 

Yang Wanming, director-generalof the Department of Latin American and Caribbean Affairs of the Chinese Foreign Ministry, answers questions from chinanews.com readers online on Jan 17, 2012. [Photo/Chinanews.com]

 

Topic: China-Latin America cooperation in culture

Q: How do China and Latin America cooperate in the field of culture?

A: China has opened 32 Confucius institutes in Latin America, covering almost all Latin American countries. Both sides also send art troupes to visit one another and conduct people-to-people exchanges. Many Chinese people like their football, music and dances and engage in studying Spanish and Portuguese. Many Chinese books have also been translated into Spanish and sold in Latin America.

Topic: Cooperation in energy

Q: What’s the current situation with Sino-Latin American energy cooperation? Some people think China is plundering energy resources there and uses it as a way to curb the US.

A: China is trying to carry out comprehensive cooperation with Latin American countries and its efforts have been well welcomed by them. The cooperation not only benefits the two parties, but also contributes to global peace, stability and prosperity. It started late and is on a relatively small scale, but has been developing fast. China imported 20.73 million tons of crude oil from Latin American countries in 2010, which accounts for 8.7 percent of China’s total import in that year. Venezuela has become China’s 4th largest oil provider. The two parties will explore cooperation on new energy. It’s totally based on equality and mutual benefit and will do no harm to the third party.

Topic: US view on China-Latin America relationship

Q: The relationship between China and Latin American countries has developed so fast. What do you think of the feeling in the US to this?

A: In recent years, the independence of Latin American countries is growing and its economic growth momentum becomes more diverse than before.

The rapid development of China-Latin America relations is on the basis of mutual benefit and win-win for both sides and is within the needs of Latin American countries’ diversified diplomacy and development strategy.

It will not only benefit development of both, but also contribute to the world’s stability and development.

China and the US have already established a consultation mechanism on Latin-America, and through four different consultations, the two parties have enhanced their mutual trust on this issue.

And the US has repeatedly stressed in their consultations that strengthening relations between China and Latin American countries will be good for Latin-America’s stability and development.

Topic: Chinese workers kidnapped in Colombia

Q: It was reported that several Chinese employees were kidnapped in Colombia by unidentified armed militants. How are they now? Could you release some information about the rescue efforts?

A: Four Chinese workers were kidnapped by some unknown armed militants in Caquetá province in Colombia on June 8, 2011. We have urged the Colombia authority to spare no effort to carry on the rescue work under the premise of guaranteeing the safety of hostages. Since then, the Chinese embassy in Colombia has kept in close cooperation and contact with Colombia’s relevant departments. The rescue work has not finished yet, but the safety of the four hostages can be guaranteed. Chinese companies are facing more risks as they go global on a larger scale. We need to increase our political backup and diplomatic guarantee to them, strengthen the consular protection and safeguard their legitimate interests. Meanwhile we advise Chinese people in Latin America to improve their sense of safety and precaution.

Q: How about China-Mexico relations?

A: China and Mexico are both developing countries and are working at enhancing people’s living standards. They hold the same positions on many international issues and regularly cooperate on these..

China and Mexico have some trade friction over trade imbalance problems, but we hope both sides can deal with the problems reasonably and from a development point of view.

We hope both can take active measures to promote the diverse, comprehensive and healthy development of the two countries’ economic and trade relations.

February 14 marks the 40th anniversary of diplomatic relations between China and Mexico. We believe the relations can become more comprehensive, steadier and healthier with the two countries’ joint efforts in the future.

Q: Can you talk about the relationship between China and Brazil?

A: Brazil is one of the biggest countries in Latin America and one of the emerging powers in the region. The China-Brazil relationship is one of the most important between China and Latin America.

In recent years, the strategic partnership between China and Brazil has made considerable progress. They maintain a good momentum of high-level exchanges and the political mutual trust is deepened.

Their economical cooperation is also deepening constantly, which has brought tangible benefits to people of both countries. Bilateral trade volume exceeded $80 billion in 2011. Investment cooperation in finance, energy, steel, and machine manufacturing has also made great progress, and is expanding constantly.

China and Brazil have active exchanges in science, technology and culture as well.

The cooperation in the fields of Earth resource satellites, agricultural technology and aviation is progressing continuously. And the cooperation in culture and education is also very close.

China’s Confucius Institute Headquarters opened two Confucius Institutes and a Confucius school in Brazil and Brazil’s important media institutions have sent many journalists to work in China.

China and Brazil are both developing countries and have broad and consistent interests on major international issues. The Chinese government attaches great importance to relations with Brazil and believes the two countries’ cooperation in various fields will make great progress with their joint efforts.

 

Global gloom places Latin America on alert – Financial Times

Interesting article written by John Paul Rathbone, Latin America editor of the Financial Times.

Every day Luis Castilla, Peru’s finance minister, says he lights a candle and “prays that China won’t crash”.

His prayers are echoed by many in a region that remains one of the world economy’s few bright spots. South America’s commodity-rich economies grew 5 per cent in the first half of this year. Last year, these new motors of the world economy added half a percentage point to global output.

But slowing Asian demand and plunging commodity prices have raised the spectre that South America, having largely escaped the 2008-09 Great Recession, may not be so lucky this time around.

Main point = Potential new financial crisis in the “Developed World” + slow down in China = Scared Latinos

Click here to read the full article direct from the Financial Times

Peru to set up sovereign wealth fund

Img courtesy of Wikicommons

Peru plans to set up a sovereign wealth fund, taking advantage of record foreign reserves and metal prices to finance investments in infrastructure and education, Finance Minister Ismael Benavides said.

The Andean country may tap its $44 billion in foreign currency reserves and tax revenue to create the fund before the President Alan Garcia’s term ends in July, Benavides said in an interview in New York today.

“We have not only reserves but extraordinary revenues from mineral exports,” the 65-year-old Benavides said, without providing details about how the fund would work. “We might come up with something in the first quarter next year.”

The fund would be modeled after a $12.8 billion fund Chile created in 2006 to hoard windfall profits from surging copper prices, Benavides said. Peru is the world’s largest producer of silver and second-largest producer of copper after Chile. Metals accounted for 62 percent of exports in the first half of 2010.

Click here to read the full article, direct from Bloomberg

David Lowell, perhaps the greatest treasure hunter in the world

David Lowell - Bloomberg

In the snake-infested jungle of southeastern Ecuador, the American explorer David Lowell found himself sliding over a waterfall and heard his head bounce off a rock “like a melon being hit by a hammer,” he says.

Lowell was 72 and prospecting for copper that day in May 2000. He stepped into the slippery streambed for a vantage point free of vipers and vines. A broken rib and throbbing head diverted him to a nearby hamlet in search of help.

“There was one man in the village who was a combination chiropractor and mortician,” Lowell says. “We decided to just buy a little tin of liniment with the picture of a dragon on it.” The expedition carried on.

In the clear water of the stream, Lowell saw enough to help him find one of South America’s richest copper deposits. This May, a joint venture of Chinese state-owned companies paid $652 million to buy Lowell’s partner in the exploration, Vancouver- based Corriente Resources Inc. Lowell kept a stake there for himself, though local opposition has prevented mining.

In a career spanning six decades and 44 countries, Lowell has made 14 major discoveries, including the world’s largest copper deposit in Chile. He found treasures where others detected nothing worth mining. Lowell revolutionized exploration and unearthed metals that helped the U.S. build the world’s largest economy. He also made investors billions.

Click here to read the entire article direct from Bloomberg

9th China International Silver Conference (CISC), Oct 15-17

Silver - Wikicommons

The 9th China International Silver Conference (CISC) will be held this week ,October 15-17.  Major players from across the industry will be heading to Beijing to partake and climb the Fragrant Hills, a beautiful mountain landscape on the outskirts of Beijing which your author climbed back in the fall of 2006.

Here’s some background information on the event. and if this isn’t enough feel free to visit http://silver2010.antaike.com/ for additional info.

As countries around the world have taken a proactive fiscal policy and monetary stimulus, as a result of the global financial crisis, economies have started to show signs of moderate recovery. At the end of 2009, international commodity markets began to rebound; gold and silver were no exception. The world economy continues to suggest complexity and uncertainty and the European sovereign credit crisis is deepening. Many analysts suggest that the price of gold and silver will continue to rise.

In 2010, two principles of global economic recovery are industrial resurgence and the gradual withdraw of government stimulus policy. Governments, under the overall objective background of improving global industrial structure, encouraging economic development methodologies, and controlling inflation, are exploring the new international financial state of affairs. In this post-crisis era, it is also important to grasp potential new financial regulations. The 9th CISC will examine new trends in the global silver market, and discuss ways market participants can help further accelerate silver industrial restructuring and revitalization.

Accordingly, the 2010 China International Silver Conference, will be hosted by Gems & Jewelry Trade Association of China, and co-hosted by China General Chamber of Commerce, China Nonferrous Metals Industry Association, China Chamber of Commerce of Metals Minerals & Chemicals Importers and Exporters, and the Silver Institute. The CISC is will be organized by Beijing Antaike Information Development Co., Ltd, and will be held in Beijing, at the Fragrant Hill Empark Hotel (five stars) on October 15th-17th, 2010.

9th China International Silver Conference (CISC) will invite important national ministries and leading global industry executives, as well as experts in China and abroad to discuss macroeconomics and the global financial situation, silver industry policy orientation, industry upgrades and technical progress. Additionally, Oct 16th is the Double Ninth Festival in the Chinese lunar calendar, which is an auspicious day worthy of celebration. The custom of ascending a height to avoid epidemics was passed down from long time ago. CISC organizers in particular are looking forward to a climbing tour to Fragrance Hill in
accordance with this event.

Conference Theme: Focus on Beijing, Explore in Development, Open up Interspace
Conference Date: Oct 15th-17th, 2010 Beijing, China
Conference Address: Fragrant Hill Empark Hotel (five stars), Beijing

Conference Scale: 300-400 attendees
Conference Attendee: Silver and precious metals producers, consumers, traders, stock and bond brokers, investors, researchers, media and etc
Conference Format: Reports, Discussion and Activities

Hosted by： Gems & Jewelry Trade Association of China
China General Chamber of Commerce
China Nonferrous Metals Industry Association
China Chamber of Commerce of Metals Minerals & Chemicals Importers and Exporters
The Silver Institute

Organized by：Beijing Antaike Information Development Co., Ltd.
Co-hosted by：Henan Jiyuan Jinli Smelting Co., Ltd.

South American Cocaine??? Spain continues to “deal gold,” as it has since the 16th century

To realize why I titled this post the way I did, you must for your own good watch this Reuters video which gives a good outline of the gold market to the very end.  Anyone who has ever walked the streets of Madrid or Barcelona between 1995-2010, knows the image of a Peruvian/ Bolivian/ other South Americans with big card board signs which say : “we buy and sell gold/silver.”

Well, like the Japanese, Spain is also inventing machines/ robots to do the work– the work being, the exchange/ commerce of gold bars.

For the record I know very little about the machine and welcome clarification from any reader.  However, the fact that Reuters mentions Spain as the first country to do this, makes me think back to the Spanish history lessons I learned from my mother and grandmother growing up as a Peruvian-American in NYC–which are of the same yolk as the history lessons taught to US-Americans about the British/ French in North American schools.

I had to learn this “Iberian” history from my family, because the US public school system gives two $h!ts about the fact that more than half the American CONTINENT (singular) was not actually colonized by English speakers.

Good evening to all from Shanghai.

Must read article about Sino-Latin American relations

A must read article for anyone interested in Sino-Latin American relations was published today on SeekingAlpha’s website.  It is written by Erik Bethel, one of the four founders and CEO of Sino-Latin Capital.  I highly recommend it to anyone even mildly interested in the growth of Sino-Latin American relations.

Click here to access the full article direct from SeekingAlpha.

Travel to any country in Latin America and you will see the visible hand of China at work: a computer manufacturing plant in Mexico, a copper mine in Peru, a football stadium in Costa Rica. In the year 2007, the thought of China in Latin America would have appeared, at best, improbable. But in a three-year stretch, China signed free trade agreements with Chile, Peru and Costa Rica, inked billions of dollars worth of deals in oil and mining projects throughout the region, and supplanted the US as Brazil’s biggest trading partner. Once almost unseen in Latin America, China’s bilateral trade has risen from $12bn in 2000 to well over $150bn today.

Given the importance of its new Asian friend, Latin Americans are rolling out the red carpets to Chinese business delegations and jumping on planes not only to Beijing but also to Shanghai, Shenzhen, and Tianjin.

Rationale Behind Chinese Investments in Latin America [...]

Please visit SeekingAlpha to read the full article

Commodity Markets; weekly roundup

Rogers International Commodity Index

(Oct 26-30, 2009)

*metals commodity prices obtained via Kitco Metals
*energy commodity prices obtained via Yahoo Finance
*agriculture commodity prices obtained via Yahoo Finance
*wheat futures via Bloomberg

New potential strikes looming for Peru’s mining industry

Shougang is not the only miner down in Peru for which trouble is brewing. Peru’s national federation of mine workers said on Friday (yesterday), it is planning to hold walkouts across the entire sector next week.

libcom.org

“The position of the workers is to go on strike on Monday starting at 9 a.m. (1400 GMT) and leave the mines,” Luis Castillo, the federation’s director, told Reuters.

Reuters reports some unions have agreed to stay on the job, but considering that Peru is the largest producer of silver in the world, #2 of zinc, #3 of copper, #4 of lead, and #6 in gold—such a walk out does have the potential ripple over into global spot prices for the above mentioned metals.

When miners held a similar strike in mid-2008 and the strike helped push copper prices toward a record high—although this was at the peak of bull markets, the market effect is no less noted. The underlying point; markets are watching and investors pay attention to these kinds of things.

Company’s which will be affected include, Volcan (VOL_pb.LM), Newmont (NEM), Freeport-McMoRan’s (FXN), Xstrata’s (XTA.L), Buenaventura (BVN), Southern Copper (PCU) and BHP Billiton (BHP).

Click here to access a more details story on this topic from Reuters.

As always, CSA will keep you up to date with relevant developments as they unfold.

~ Benito