106 - The International Resource Journal

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26 Brazil Political impasse may delay oil auctionsgoverning coalition, and the main opposition BrazilianSocial Democracy Party (PSDB).The elections represented the first electoraltest for the Social Democratic Party (PSD), whichwas formed by a dissident Democrat (and formerSao Paulo mayor) Gilberto Kassab in early 2011,and has since attracted enough defectors fromother parties to claim the status of fourth-largestparty in the lower chamber of Congress. Convincedthat the PSD is a viable political force, PresidentRousseff has invited the party to formally join hergovernment. The move will lessen her dependenceon the not-always-reliable PMDB in the near term,and reduce the danger that the PSD might team upwith one or more opposition parties to challengeBenedict McTernan, Managing Editorof The PRS GroupBraZIl’s TWo-stage municipal elections held in Octoberwere closely watched as a gauge of the effectof a notorious vote-buying scandal on the popularityof the main governing Workers’ Party (PT). In thatregard, the results suggest that the PT remains ina strong position to retain control of the presidencyin 2014. The party captured the biggest prize of theelection, the mayor’s office in Sao Paulo and its totalof 635 victories in some 5,500 races nationwidewas exceeded only by the Brazilian DemocraticMovement Party (PMDB), the largest congressionalparty and a member of President Dilma Rousseff’sthe PT at presidential and congressional electionsin October 2014.Rousseff’s expanded majority will not count formuch when it comes to breaking an impasse overlegislation altering the formula by which royaltieson oil production are distributed among Brazil’s 27states. The government has announced plans toauction off new oil-drilling licenses for the first timein five years in 2013, but cannot proceed on thatfront until the royalties issue is resolved.The dispute centers on whether the newformula, which would spread the income fromroyalty payments more equitably among allthe states, will be applied to existing as well
FEBRUARY 2013 The International Resource Journal27as future oil operations, or only the latter. Thepresident vetoed sections of the bill that wouldhave applied the new formula to oil currentlyunder production, a move that would cost nonoilproducing states billions in revenue.Representatives from the non-oil producingstates, who control an overwhelming majority ofseats in the Congress, were poised to overrideRousseff’s veto in mid-December with the supportof lawmakers from the governing coalition and theopposition. However, the vote was stalled by the SupremeCourt, which ruled that lawmakers must firstaddress hundreds of other presidential vetoes.The Congress will not return from its summerbreak until early February and while legislativeleaders have pledged to move quickly to clearthe backlog, the dispute over oil revenues will notbe easily resolved. For their part, the governorsof the oil-producing states – Rio de Janeiro, SaoPaulo and Espirito Santo – have threatened toturn to the courts to block implementation ofthe new royalties scheme if Congress overridesthe president’s veto.More than 170 post-salt licenses are scheduledto be auctioned in May, while the muchanticipatedoffer of licenses for offshore pre-saltfields is supposed to commence in November.The Brazilian Petroleum Institute has warnedthat further delays could force the oil majors tolook for opportunities elsewhere, but given theuncertain fate of the oil royalties legislation, andthe seeming intractability of the dispute thatis delaying finalization, the possibility that thetimetable for auctioning the licenses might bepushed back cannot be ruled out.The battle over the formula for distributingroyalty income is emblematic of the challengesposed by a fragmented political landscape inwhich delivering the goods for local constituentsfrequently trumps party or coalition loyalty.The expansion of the PT-led coalition with theinclusion of the PSD will provide the presidentwith more options for reaching a congressionalmajority and Rousseff’s strong approval ratinggives her important leverage on that score. Thatsaid, her political capital is finite and she cannotafford to expend too much of it in battles wherethe odds of success are long.Benedict McTernan is Managing Editor of The PRSGroup, a consultancy focused on the quantificationand analysis of country-level political, economic,and financial risks. He specialises in coverage ofthe Americas and the MENA region.
Page 3 and 4: EDITOR’S NoteAs our readers will
Page 5 and 6: IRJ TeamJuliet Langton | Editor | j
Page 8 and 9: Table of ContentsFEBRUARY 2013 | VO
Page 10 and 11: 10 SECTION TitleNEWS in FOCUS
Page 12 and 13: 12 SECTION TitleNEWS in FOCUS“de
Page 14 and 15: 14 SECTION TitleNEWS in FOCUSminer
Page 16 and 17: 16 COVER FEATURE Mining in Latin A
Page 24 and 25: may del24 Brazil Political impasse
Page 28 and 29: 28 BRAZIL Miners under the spotlig
Page 30 and 31: 30 BRAZIL Miners under the spotlig
Page 32 and 33: 32 THE RESOURCE CHANNEL Is obesity
Page 40 and 41: 40 MINERALS Lithium in 2013040Lith
Page 42 and 43: 42 MINERALS Lithium in 2013Chris B
Page 44 and 45: 44 MINERALS Lithium in 2013covery
Page 46 and 47: 46 MINERALS Lithium in 2013
Page 48 and 49: 48 MINERALS Cobalt Development Inst
Page 58 and 59: 58 RISK The Chinese are catching o
Page 64 and 65: 06Alara ReShifting64 AUSTRALIA Ala
Page 66 and 67: 66 AUSTRALIA Alara Resources
Page 68 and 69: 68 AUSTRALIA Alara ResourcesAll th
Page 70 and 71: Chinalco YCopper ResDeeper undergro
Page 72 and 73: 72 AUSTRALIA Chinalco Yunnan Coppe
Page 74 and 75: 74 AUSTRALIA Chinalco Yunnan Coppe
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76 AUSTRALIA Chinalco Yunnan Coppe
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0778 AUSTRALIA Red Mountain Mining
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82 AUSTRALIA Red Mountain MiningRe
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86 AUSTRALIA Red Mountain Miningth
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GoldplatUncoveunexpe088
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90 africa Goldplat
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92 africa GoldplatRecover Gold and
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94 africa Goldplat
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AFRICAHelvetic SolarContractorsSunn
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144 CANADA MarathonOwned by a numb
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146 CANADA MarathonDiscover Marath
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148 CANADA MarathonOur experienced
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150 CANADA MarathonPremierServiceT
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152 CANADA MCW Energy Group152MCWE
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154 CANADA MCW Energy GroupOil san
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156 CANADA MCW Energy GroupUTAH’
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158 CANADA MCW Energy GroupShovel-
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160 CANADA MCW Energy GroupMCW has
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Rio VerdeNutrient richFertiliser mi
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164 CANADA Rio Verde
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166 CANADA Rio Verdestates current
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What'shAPPENING 2014-7 Investing in
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Mar20133-6 PDAC 2013 International
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May20135-8 CIM Conference & Exhibit
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July20131-3 The Australian Mine Ven
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176 EVENTS What's Happening 2010Se
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178 EVENTS What's Happening 2010No
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AT THE FOREFRONTOF THE GRAPHENEREVO
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