Brazilian Companies Eye More African Investment

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VENTURES AFRICA – The race to clinch African investment is not for China alone as more Brazilian companies are moving into Africa to cement economic ties with the continent’s emerging markets.

A couple of years back, world No2 miner, Vale, pitched its tent in Africa by exporting its first overseas coal shipment from Mozambique. It started with the exportation of 35,000 metric tons of thermal coal from the port of Beira to the United Arab Emirates – now Vale is aspiring to double its capacity to 22 million tons of coal annually over the next few years. The company plans to spend more than $12 billion across the continent over the next five years.

However, according to a CNN report, Vale is not the only Brazilian firm eyeing a spot on the continent as the South American giant’s state and private firms have quietly made inroads into the continent, operating mostly in strategic sectors such as infrastructure, energy and mining.
Other Brazilian companies that have pitched their tent in Africa include Odebrecht, Brazil’s biggest construction company, and Petrobras, a state-controlled energy group.

The relationship between Africa and Brazil dates back to the era of slave trade, and Brazilian leaders are quick to use the country’s cultural affinity with Africa as an advantage in its competition.

According to Cristina Stolte, researcher at the German Institute for Global and Area Studies, “The fact that the majority of Brazil’s population is of Afro-Brazilian origin – making Brazil the world’s largest black population after Nigeria – is frequently quoted by the almost exclusively white governing elite of Brazil in order to stress Brazil’s cultural similarities with the African countries.”

“Brazilian officials as well as businessmen frequently stress the aim of contributing to the development of African countries by pointing to the fact that Brazil is hiring and training local workforce and offering social projects to foster local development.”

Trade between Brazil and Africa has jumped from around $4 billion in 2000 to about $20 billion in 2010.

This, analysts accredit to the effort of Brazil’s former President, Lula da Silva who made Africa a strategic priority for Brazil as part of the country’s efforts to expand its global influence. The same stride is made under the present leadership of by Dilma Rousseff, who in the first year of her office visited Angola, Mozambique, and South Africa.

The continent has a “new opportunity. I’m based here in (Mozambique capital) Maputo because our investments here in Mozambique are the most important,” says Ricardo Saad, who oversees Vale’s Asia, Australia and Africa operations.
Saad says that Vale, along with making profits, is committed to the development of local communities.

“When we talk about Africa, it’s not possible to talk about Africa not thinking about sustainable development and respect to the people, respect to the environment, respect to the planet, but having the sense that our development is going to be also a local development,” he says.

“We are here to be a Mozambican company — we come from Brazil, but we are Mozambican now,” Saad adds.

Vale operates in several African countries, including Angola, the Democratic Republic of Congo and South Africa. It has been in Mozambique since 2004. The thermal coal was mined from the company’s Moatize concession in western Mozambique, an area believed to hold one of the world’s biggest untapped reserves.

Over the years, the mining giant has broaden its pitch by spending millions of Dollars on infrastructure, including a railway line passing through Malawi and connecting its Moatize facility with Nacala, the largest deep-water natural port on Africa’s eastern coast.