Category: Brazil

Brazil’s Companhia Vale do Rio Doce (CVRD), the world’s largest iron ore exporter, has made an unsolicited bid for Canadian nickel producer Canico Resource Corp for C$17.50 in cash per common share. The deal would be worth C$725 million ($609 million). Canico shares soared by one-third after the offer, a 29% premium on Canico’s stock price for the past 30 days. CVRD says the deal is part of its strategy to become a global player in the non-ferrous metals industry. Canico says it is not looking for a buyer.

Roberto Jefferson, the politician stripped of his seat in the Chamber of Deputies Wednesday night, has attacked President Luiz Inácio Lula da Silva and his government. Jefferson, former Brazilian Labor Party leader, reversed his earlier support of Lula and accused him of inaction. Jefferson kicked off the scandal that has engulfed Lula’s government since June by revealing the government was buying votes in Congress.

Brazil’s central bank cut its benchmark lending rate a quarter-percentage point to 19.5% from a two-year high as inflation slows. The semi-independent bank began raising interest rates 17 months ago, slowing growth to a forecast 3.4% this year from 4.9% in 2004. The currency gained 25% in the past 12 months and inflation has fallen to 6%. The central bank’s inflation target is 5.1% this year and 4.5% in 2006.

Canada’s natural gas producer EnCana Corp. and US partner Kerr-McGee Corp. have announced a sizeable oil discovery off the coast of Brazil in the Campos Basin. Meanwhile, the company has sold all its oil operations in Ecuador to Chinese group Andes Petroleum Company for $420 million

Brazil’s President Luiz Inácio Lula da Silva’s public approval rating has fallen to an all-time low of 50%, while the government’s has slipped to 35.8%, according to the most recent poll. The survey revealed that most people think he knew about the corruption within the government and is not doing enough to stamp out the problem. The president has publicly denied any knowledge of irregular activity and has promised to punish those found responsible. Despite his drop in popularity, Lula is still the favourite to win another term.

An adviser to Brazilian President Luiz Inácio Lula da Silva has said the government will limit imports of Chinese textiles and shoes. The move to protect domestic manufacturers is likely to come into force this month.

In response to accusations made last week against him by the owner of a restaurant concession, Severino Cavalcanti, president of the Chamber of Deputies, says he will not resign. Brazil’s worst corruption scandal in over a decade has paralyzed the left-wing government of President Luiz Inácio Lula da Silva since June.

Brazil’s national oil company Petrobrás raised domestic oil and gas prices Saturday for the first time this year in the wake of record high prices of crude oil following Hurricane Katrina. The company said the price of gas was being raised 10% and diesel 12%. Analysts do not think the price increase will have an impact on Brazil’s declining inflation rates.

The owner of the restaurant concession in Brazil’s lower house admitted in a news conference that he made monthly payments to Severino Cavalcanti, the pro-government president of the Chamber of Deputies. Sebastião Augusto Buani, the restaurant’s owner, says he bargained with Cavalcanti to reduce the payments by one-third to $5,400 a year. A votes-for-bribes and campaign funding scandal has engulfed the government of President Luiz Inácio Lula da Silva since June.

Brazil’s industrial output slowed for the first time in two years. Manufacturing and mining production in July rose only 0.5% year-on-year, below analysts’ median forecasts of 2.9% and lagging well behind the 6.3% recorded in June. The central bank is expected to cut interest rates soon to counteract a slowdown.