It has emerged in Brazil that four months ago in September a Chinese group obtained a 15% share in the world’s largest Niobium producer.
The company is called ‘Companhia Brasileira de Metalurgia e Mineração’. The metal is quite rare outside Brazil, which has the vast majority of the World’s exploitable reserves ( believed to be over ninety per cent). However, some experts believe there are untapped reserves in Africa and elsewhere, although they are years away from significant development, even if suitable accessible quantities exist.
Niobium is a very valuable metal because of its important uses for the electronics and nuclear industries. It is also in demand as a strengthening component in steel alloys, in particular for aviation engines, some of whose components operate under high pressure and temperature.
The Brazilian company is based in Minas Gerais where it is an important component of the Moreira Salles group.
The Chinese organisation paid just under two billion US dollars for its share. A very important wedge of cash for the Company, certainly, but many commentators question the wisdom of the sale to overseas buyers of such a vital strategic material. Of particular concern is that this isn’t the first or only such sale. Apparently a Japanese and Korean combine also bought a 15% share in March of last year, for a similar (but slightly lesser) amount.
So Asia is seriously interested in international investment in Brazil, at least in this important metal. Certainly the two fifteen-percent sales have brought much needed cash into the country, enabling Brazil to afford more easily social projects such as affordable housing.
However, many are seriously concerned over the other long-term and more controversial implications.
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