Best of the Week
Most Popular
1.How U.S. Dollar Destruction Threatens the Global Economy - Steve Forbes
2.Why UK House Prices Will Continue Rising - 'It's Immigration Stupid' - Nadeem_Walayat
3. Bitcoin Price at Beginning of a Move up? - Mike_McAra
4.Gold Price to Plunge, Visiting Fort Knox - David_Hague
5.Silver Price Forecast - Metal to Gain Ground in August on These Factors - Jim Bach
6.Gold And Silver Will Rise With US Dollar Demise, Just Not Soon - Michael_Noonan
7.Bitcoin Price Strong Move Possible - Mike_McAra
8.Israel Gaza War Crimes - Soldier's Ordered to Shoot Civilians Including Children - C4News - C4News
9.UK House Prices Crash Warning - Daily Mail Cognitive Dissonance - Nadeem_Walayat
10.UK House Prices Boom - Top Quick Cheap Tips to Help Sell Your Home - Nadeem_Walayat
Last 5 days
Gold Rising Interest Rate Fallacy - 22nd Aug 14
Jackson Hole: Myth of the All Powerful Central Banker Continues - 22nd Aug 14
Partying On In The Terror State - Thank God for Nuclear Weapons - 22nd Aug 14
The Something for Nothing Society - Lifecycle of Bureaucracy - 22nd Aug 14
Hitting The ISIS Panic Button In The Middle East - 22nd Aug 14
US Stock Indices 10-Year Consolidation Patterns ... Upside Breakouts? - 22nd Aug 14
Gold and Silver Price Getting Set To Explode Higher - 22nd Aug 14
Deflation's Final Curtain Call - Part II - 22nd Aug 14 - Clif_Droke
Gold Big Picture: Most Important - 22nd Aug 14
How the “Uncertainty Factor” Drives Crude Oil Prices - 22nd Aug 14
Inflation, Interest Rates, and Why You Should Own Gold - 22nd Aug 14
U.S. Interest Rates Can Rise States Fed President - 22nd Aug 14
Why Emotional Discipline is Key to Trading Success - 21st Aug 14
Getting the Most Value from Your “Geriatric Cruiser” - 21st Aug 14
Mafia Boss Claims Stocks A Bubble, Buy Physical Gold and Silver - 21st Aug 14
Outrage! On The Beheading of Our Media Brother James Foley - 21st Aug 14
Stock Market Crash a Historical Pattern? - 21st Aug 14
The Black Box Economy - 21st Aug 14
The Bond Market is taking Advantage of Janet Yellen`s Dovishness - 21st Aug 14
Meet Your Investment Manager - 21st Aug 14
Gold and Silver Trading Alert as U.S. Dollar Soars to New Highs - 21st Aug 14
President Obama Strongest Statement Yet on Israel Gaza War - 20th Aug 14
Peak Gold? Russia To Surpass Australia As World No 2 Gold Producer - 20th Aug 14
AI, Robotics, and the Future of Jobs - 20th Aug 14
Stock Market Investors What's Your Exit? - 20th Aug 14
The Gold War - Thinker, Trader, Holder, Why? - 20th Aug 14
Ukraine Interest Rates Soars to 17.5% As External Debt Cannot be Repaid - 20th Aug 14
Rising Interest Rates and The End of Stimuland - 20th Aug 14
Inflation Watch: $245,000 to Raise a Child in United States - 20th Aug 14
Inside the Stunning Deal That Put Apple and IBM on the Same Side - 20th Aug 14
The US Gold in Fort Knox is Secure, Gone, or Irrelevant? - 19th Aug 14
Bitcoin Price On The Brink of a Possible Reversal - 19th Aug 14
Why Tesla Stock Price Will Double in the Next 12 Months - 19th Aug 14
Europe's Economic Malaise: The New Normal? - 19th Aug 14
The Coming U.S. Economic Collapse Will Trigger a Revolution - 19th Aug 14
Market Bubbles, Bubbles Everywhere - 19th Aug 14
This is Your Economic Recovery With and Without Drugs - 19th Aug 14
Stock Market Strong Start to Jackson Hole Week - 19th Aug 14
Iraq, Ukraine - Oh, What A Tangled Mess We Weave - 19th Aug 14
How to Apply Moving Averages as a Trading Tool - Video - 18th Aug 14
Why Short Stock Traders Are Losing Money This Week - 18th Aug 14
Stock Market Rally May be Complete - 18th Aug 14
Why Chinese Citizens Invest In Gold - 18th Aug 14
Palladium Reaches 13-Year High Over $900 oz as Gold Trading Volumes Surge 66% - 18th Aug 14
Understand and Profit from Surging European Volatility - 18th Aug 14
No Escape from The Dollar as The Currency Standard - 18th Aug 14
Stock Market New Highs Less Certain - 18th Aug 14
German Stock Market DAX About To Drop - 18th Aug 14
Stay on Board - Stock Market Big Picture - 18th Aug 14
Europe Economy Is Tanking, QE Is Coming - 18th Aug 14
Are You Ready for The Greatest Technology Revolution Yet? - 17th Aug 14
Why King Coal is Bigger than Oil or Gas - 17th Aug 14
U.S. Empire of Death and Lies - 17th Aug 14
Ukraine - Whose Spin Are We Caught Up In Here? - 17th Aug 14
Time Decay And No Escape For Abenomics - 17th Aug 14
India BSE SENSEX The Party Is Over In Bombay - 17th Aug 14
Stock Market Uptrend Looks Underway - 17th Aug 14
The Key Role Of Conspiracy Theory In Dumbing Down Society - 17th Aug 14
The Federal Reserve in Denial Mode - Bond Market Explained - 17th Aug 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

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.


© 2005-2014 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

Free Report - Financial Markets 2014