Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
SPX/Gold, Long-term Yields & Yield Curve 3 Amigos Update - 22nd Jun 18
Gold - How Long Can This Last? - 22nd Jun 18
Dow Has Fallen 8 days in a Row. Medium-long Term Bullish for Stocks - 22nd Jun 18
Trouble Spotting Market Trends? This Can Help - 22nd Jun 18
Financial Markets Analysis and Trend Forecasts 2018 - A Message from Nadeem Walayat - 21st Jun 18
SPX Bouncing Above Support - 21st Jun 18
Things You Need To Know If You Want To Invest In Bitcoin Now - 21st Jun 18
The NASDAQ’s Outperformance vs. the Dow is Very Bullish - 21st Jun 18
Warning All Investors: Global Stock Market Are Shifting Away From US Price Correlation - 20th Jun 18
Gold GLD ETF Update… Breakdown ? - 20th Jun 18
Short-term Turnaround in Bitcoin Might Not Be What You Think - 19th Jun 18
Stock Market’s Short Term Downside Will be Limited - 19th Jun 18
Natural Gas Setup for 32% Move in UGAZ Fund - 19th Jun 18
Magnus Collective To Empower Automation And Artificial Intelligence - 19th Jun 18
Trump A Bull in a China Shop - 19th Jun 18
Minor Car Accident! What Happens After You Report Your Accident to Your Insurer - 19th Jun 18
US Majors Flush Out A Major Pivot Low and What’s Next - 18th Jun 18
Cocoa Commodities Trading Analysis - 18th Jun 18
Stock Market Consolidating in an Uptrend - 18th Jun 18
Russell Has Gone Up 7 Weeks in a Row. EXTREMELY Bullish for Stocks - 18th Jun 18
What Happens Next to Stocks when Tech Massively Outperforms Utilities and Consumer Staples - 18th Jun 18
The Trillion Dollar Market You’ve Never Heard Of - 18th Jun 18
The Corruption of Capitalism - 17th Jun 18
North Korea, Trade Wars, Precious Metals and Bitcoin - 17th Jun 18
Climate Change and Fish Stocks – Burning Oxygen! - 17th Jun 18
A $1,180 Ticket to NEW Trading Opportunities, FREE! - 16th Jun 18
Gold Bullish on Fed Interest Rate Hike - 16th Jun 18
Respite for Bitcoin Traders Might Be Deceptive - 16th Jun 18
The Euro Crashed Yesterday. Bearish for Euro and Bullish for USD - 15th Jun 18
Inflation Trade, in Progress Since Gold Kicked it Off - 15th Jun 18
Can Saudi Arabia Prevent The Next Oil Shock? - 15th Jun 18
The Biggest Online Gambling Companies - 15th Jun 18
Powell's Excess Reserve Change and Gold - 15th Jun 18
Is This a Big Sign of a Big Stock Market Turn? - 15th Jun 18
Will Italy Sink the EU and Boost Gold? - 15th Jun 18
Bumper Crash! Land Rover Discovery Sport vs Audi - 15th Jun 18
Stock Market Topping Pattern or Just Pause Before Going Higher? - 14th Jun 18
Is the ECB Ending QE a Good Thing? Markets Think So - 14th Jun 18
Yield Curve Continues to Flatten. A Bullish Sign for the Stock Market - 14th Jun 18
How Online Gambling has Impacted the Economy - 14th Jun 18
Crude Oil Price Targeting $58 ppb Before Finding Support - 14th Jun 18
Stock Market Near Another Top? - 14th Jun 18
Thorpe Park REAL Walking Dead Living Nightmare Zombie Car Park Ride Experience! - 14th Jun 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Russia & Brazil’s Strategic Alliance Continue

Commodities / Metals & Mining Jul 05, 2012 - 08:28 AM GMT

By: Anthony_David

Commodities

Best Financial Markets Analysis ArticleRussia and Brazil, both major commodity nations, make a strategic pair with Russia ranking among the world’s top producers in the energy and metals sectors while Brazil is a strong exporter of agricultural products, cars, machinery and iron ore. Trade between the two countries grew five-fold in the period from 2002-2008. In 2010 Brazil and Russia entered into an agreement to boost trade between their countries and enter into strategic partnerships in the areas of energy, infrastructure and space exploration.


More significantly, in advance of global credit possibly drying up, the two countries along with the other BRICS nations of China, India and South Africa, are firming up agreements to trade in their own currencies instead of the U.S. dollar.

Since the fall of the Soviet Union, Russia has transitioned from a globally isolated economy to a more global market oriented economy. With the decks cleared for Russia’s entry to the World Trade Organization the country will open up to products and services from countries all around the world. With the exception of the energy and defense related sectors most of Russia’s industries were privatized in the 1990’s. However, the private sector is still subject to strong interference by the state. Since much of the country’s economy is based on commodity exports, it is subject to the wild swings of global commodity prices. Russia was hard hit by the 2008-09 global oil crisis and the Russian government spent billions of dollars of international reserves to slow down the run on the ruble. Since 2011, high oil prices brought the country’s economy back on an even keel. However, 2012’s falling oil prices have caused another run on the ruble. Russia’s over dependence on oil makes it very vulnerable to crude market shocks.

Russia belongs to the G8, G20 as well as BRICS. It has all the aspects of a developed economy as well as many aspects of a developing economy. With its as yet untapped, vast and significant mineral resources, and technological advancements Russia has the ability to become a global powerhouse. Russia is the world’s largest miner of diamonds accounting for 25% of global production. It also has large reserves of gold and silver and accounts for a significant percentage of global production. In 2011, Russia became the world’s leading oil producer. It is the second largest producer of natural gas and the third-largest producer of steel and aluminum. It has the world’s largest natural gas reserves, second largest coal reserves and the eighth largest oil reserves.

The Russian mining sector is unable to attract the kind of investments that it needs because of the country’s bureaucracy and restrictive laws for foreign investment and mining permits, especially in mineral categories deemed as critical or strategic by the Russian government.

Brazil is one of South America’s most influential countries and one of the world’s largest democracies. Similar to Russia, in Brazil also the state plays a very strong role in critical strategic sectors like energy, oil and banking. Since 2003, the country has steadily improved its overall macroeconomic stability. In 2008 global recession did not spare Brazil as the country’s commodity based exports were hit by falling global demand and lowered spending. With a series of government initiatives, in 2010 the country was one of the first emerging markets to post a recovery. High interest rates make Brazil a haven for foreign investors, and this has resulted in huge capital inflows that have contributed to the appreciation of the Brazilian real. When currency appreciation started hurting Brazilian manufacturers the government stepped in to contain the foreign exchange markets by imposing higher taxes on some of the foreign funds. The Brazilian government’s considerable influence in every facet of the country’s economy is visible in the slew of stimulus projects that it has set in motion to blunt the current slowdown.

Brazil is rich in Iron Ore, Tin, Pyrochlore (from which ferroniobium is extracted), Bauxite, Manganese, Tantalum, Gold, Gemstones and China clay. Most of this mineral wealth has only been partially exploited to date. Brazilian company Vale is the world’s second largest mining company and the world’s largest iron ore producer with 65% of its revenues coming from iron ore exports. The company has emerged as a global player with stakes in mines all over the world. Brazilian iron ore exports account for 78% of the country’s mining exports powered mainly by Chinese demand for steel. Brazil is the world’s second largest producer of manganese after South Africa. Though Vale accounts for 95% of Brazil’s manganese ore production, manganese accounts for only 2.2% of the company’s overall business.

Gold has become Brazil’s second important mineral export after iron ore. With 4.5% of the world’s gold reserves, the country has become the world’s 13th largest gold producer accounting for 2.5% of global gold production. Brazil has the fifth largest global Bauxite reserves and accounts for 14% of the world’s bauxite production. It is also home to a fifth of the world’s tin reserves, 3% of world’s zinc reserves, 6.6% of the world’s nickel reserves, 2% of the world’s copper reserves and 7% of global uranium reserves. Brazil has 90% of the world’s known niobium resources and dominates world niobium production. Despite its considerable phosphate and potassium reserves Brazil still depends on fertilizer imports for its agricultural industries.

Though Brazil is home to significant and abundant mineral resources, and has drawn in huge investments, lack of infrastructure and access to advanced technology is seen as a major stumbling block to achieve full scale development.

By Anthony David

http://www.criticalstrategicmetals.com

The mission of the Critical Strategic Metals Web Site

is to serve as a monthly compass for those who take a fundamental view of investment regarding the Molybdenum, Manganese and Magnesium metals markets, are concerned with the emerging critical under-supply of these strategic metals to Western nations and wish to profitability chart their course. Each month we will research and provide, in as short and concise a manner as possible, the most applicable information available on resources that will have the biggest impact on our day to day lives. Click here to sign-up for our FREE monthly report.

© 2012 Copyright  Anthony David- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules