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Goodman looks to US and Brazil pipeline as it lifts profit forecast (This article was written by Kylar Loussikian and was published in the AFR on February 13, 2015) Industrial property giant Goodman Group has flagged an expansion of its development pipeline in the US and Brazil, and more major asset sales, as it lifted full-year earnings forecast to a 7 per cent increase on last financial year.

On February 12, Goodman posted an operating profit of $327 million for the first six months of the year, a 10 per cent increase on the previous corresponding period. Total assets under management rose to $29.4 billion in the first half, due to $1.3bn of development completions, largely undertaken on behalf of Goodman’s managed funds or third parties. Chief executive Greg Goodman said the company and its managed funds had disposed of $1.1bn in assets split across Australia and Britain.

Mr Goodman estimated that 150,000sq m in warehousing was already under construction, with work to begin on a further 100,000sq m by the end of June. Goodman is building another 275,000sq m of warehouse space in Brazil through a partnership with the largest local commercial property developer WTorre, the WTGoodman subsidiary previously flagging an $855m pipeline. “It (Brazil) will be in for a pretty tough year as far as the economy is concerned, so there are counter cyclic land acquisit ion opportunities in Brazil,” Mr Goodman said. Combined, work in the US and Brazil now represents nearly 20 per cent of Goodman’s total development work in progress. ↑Return to Index

This issue (Click on each heading to open article)

Goodman Group looks to US and Brazil for growth 1

Air New Zealand becomes Patron Member of ALABC 2

Chile seeks Australian expertise in water 2

New appointment to COALAR executive committee 4

Expanded Air Services Agreement between Australia & Chile 4

Chairman’s message 5

Opinion: Mexico and Australia – New Era for Natural Partners 6

Industry Focus – Water

- 10 new desalination plants for Chile 7

- Queensland universities to feature at Water Week in Chile 8

- Brazil seeking water alternatives 9

Peru’s first step to full membership of OECD 9

Australian mining automation technology in demand 10

Mining Overview

- Latin Resources 11

- Orocobre 11

- Herencia Resources 11

- Beadell Resources 11

- Troy Resources 12

- Ausquest 12

- Hot Chili 12

Economic snapshot of Latin America 13

BBVA currency report 13

Colombia seeks to become hub for music industry 15

Melbourne Briefings – SAVE the date 16

Costa Rica to float currency 16

Argentina to relax currency controls for importers 16

Focus on mine health and safety 17

Queensland METS companies look to Peru 18

Mexico sets automobile production record 18

Industry Focus: E-Commerce

- Facts and figures on Latin America’s e-commerce market 19

- B2C e-commerce potential in Latin America 20

New Zealand to cooperate with Cuba in the Pacific 20

Uruguay’s new administration 21

For the Diary 22

Latam News February, 2015

Newsletter of the Australia-Latin America Business Council

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Air New Zealand becomes latest Patron Member of the ALABC

We are delighted to announce that Air New Zealand has become the ALABC’s latest Patron Member, as it proceeds with putting in place all of the arrangements for the expected December launch of direct flights from Auckland to Buenos Aires.

The much anticipated service will see Air New Zealand and its partner airlines connect flights from Australia and cities throughout Asia to this new three times weekly return service.

The service will be offered on an intended code-share arrangement with Aerolíneas Argentinas, with tickets on sale in March and flights commencing in December, subject to necessary approvals, which are expected to be forthcoming. The direct service will have a flight time of around 12 hours and will see Air New Zealand will code share on Aerolíneas Argentinas’ services to Brazil. Air New Zealand Chief Executive Officer Christopher Luxon says the new destination, the airline’s 28th international port, opens up an exciting new world for travellers from both New Zealand and Australia. "South America was once the domain of the intrepid explorer, but the direct service to Buenos Aires, with a flight time of around

12 hours, means a quick and action packed getaway is now a reality. Buenos Aires is the most popular tourist city in South America and is a perfect stepping stone for those who then want to explore the country, or continent, further." "We’ve been very clear about our aspirations for growth in the Pacific Rim . . . . . this new route to Buenos Aires further strengthens our network in the Pacific Rim. Argentina is an exciting new destination for New Zealanders, and with seamless one-stop connectivity through Auckland it will provide a fantastic opportunity for Australians as well."

The service will also enable Argentineans to travel directly to New Zealand and then on to Australia on Air New Zealand’s extensive trans-Tasman network, or to Singapore and South East Asia. ↑Return to Index

Chile seeks Australian expertise to reform its water policy frameworks (This article was supplied by Austrade) A delegation of senior Chilean government officials and scientists recently met with Australian water experts to explore Australian approaches to water management issues. The mission, led by CSIRO Chile and supported by Austrade, included meetings with Australia’s Bureau of Meteorology, the Murray-Darling Basin Authority, the Commonwealth Department of the Environment and the former National Water Commission. The delegation also met with representatives from the Australian agricultural, industrial, environmental, scientific and state government communities.

As Chile enters its sixth year of drought, its Government is proposing significant reforms to its water management frameworks. The Government sees the Australian reform experience as being of particular interest, given the similarities between the two countries. Both Australia and Chile have an uneven distribution of water sources, both are impacted by El Niño y La Niña and both have to balance industry growth with dwindling water resources and environmental concerns. Carlos Estevez, Director of Chile’s General Water Directorate, said: ‘We are very interested in learning more about the legal frameworks to manage water, [as well as] the obstacles and solutions to administer and share water.

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‘Chile and Australia share many similarities in this sense – for example, we both have a market system that allows people to use water, but it’s difficult to know how to manage competing demands for the resource, especially when they increase.’ Dr Reinaldo Ruiz, Chile’s Presidential Delegate for Water, highlighted that ‘generating a common space between the key stakeholders in government, industry and community will support the success of a water reform process in Chile’. Austrade Chile’s Trade Commissioner Daniel Sullivan said: ‘Australia’s water management history provides valuable experience in information-gathering frameworks, scientific research and stakeholder engagement methods. A prime example is Australia’s Murray-Darling River Basin Management plan, which brings agreement across four state and one territory government to achieve a balance between environmental, economic and social considerations.’ Australia is already collaborating with Chile on water management solutions. For example, the Chilean Government contacted CSIRO Chile’s Research Foundation to develop an Integrated Basin Management Plan for the Copiapó river basin in Chile’s arid north. The initiative has scope to be broadened out to other regions of Chile. The Austrade team in Chile is undertaking further initiatives, including organising a delegation of Australian water management experts to speak at Water Week Latin America (23–27 March 2015) and promote Australian water expertise to Latin American governments and organisations. Find out more about supplying water solutions to Chile or contact Austrade for information. ↑Return to Index

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Giovanna Webb appointed to the Executive Committee of COALAR This month saw the Minister for Foreign Affairs, Julie Bishop, and the Member for Solomon, Natasha Griggs, welcome the appointment of Ms Giovanna Webb (pictured) to the Executive Committee of the Council on Australia Latin America Relations (COALAR). Ms Webb – who originally hails from Colombia – is an eminent Northern Territory businesswoman and winner of the 2013 Northern Territory Rural Industries Research and Development Corporation’s Rural Woman of the Year Award. An Australian of the Year finalist in 2014, she has successfully combined her business and research expertise to assist in the economic development of local indigenous communities by providing hands-on business and training skills. Ms Webb has also been selected as one of the influential 2014 “100 Colombianos” living outside Colombia (www.100latinos.com). The award ceremony will take place in Bogota next month and will be presided over by the Colombian President, Juan Manuel Santos. ↑Return to Index

New Air Services Agreement allows for doubling of Australia-Chile services A new air service arrangement between Australia and Chile makes it possible for flights between the two countries to double—expanding the main gateway for Australians to South America. The announcement of the new arrangements was made on February 16 by the Deputy Prime Minister and Minister for Infrastructure and Regional Development, Warren Truss. On the successful renegotiation and scaling up of the deal between the two countries, Mr Truss said that “Effective immediately, designated airlines from Chile and Australia will each be entitled to operate up to 4,000 seats a week across the South Pacific,” Mr Truss said. “This doubles the previous capacity and opens up opportunities for Australian airlines to better serve holiday-makers and other travellers to South America.”

Mr Truss said negotiations had also removed all restrictions on airlines' ability to code share—allowing Australian and Chilean airlines to build their networks and serve new markets through joint services. “Open code share is a key objective for Australian airlines, as it enables them to build networks that support their investment in key hubs, such as Santiago,” he said. “It will now be possible for Qantas to build on its existing code share relationship with the LATAM Airlines Group to link Australia with even more destinations across South America, via Santiago. “The Australian Government is committed to ensuring that we have the aviation capacity necessary to meet future demand and to ensure that

Australian airlines can grow and compete internationally.” These new arrangements, when combined with the December, 2015 launch of Air New Zealand’s service connecting Auckland and Buenos Aires, should result in not only an increase in the number of flights crossing the Pacific, but hopefully a more competitive pricing structure for tickets that will in turn increase the exchange of tourists, students and business visits. The ALABC is delighted to see these new arrangements in place and looks forward to continuing to work with the Latam Group, Qantas and Air New Zealand, to promote the business ties between Australia and Latin America. ↑Return to Index


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Chairman’s Message Whilst there is no doubt that economic activity is not as buoyant as it has been in recent years - particularly in the resources sector - I don’t believe that the general pessimism that seems to permeate the news flow appearing in the Australian media on almost a daily basis is warranted. The Australian economy is still performing better than that of most countries and, looking at the situation from an Australia-Latin America perspective, there is plenty to be happy about. Foremost is the fact that Australia and Chile have just concluded a new Air Services Agreement that provides scope for a doubling of the number of flights connecting the two countries. This initiative is very welcome and should, in time, significantly boost the leisure, student and business travel market between not only these two countries, but also with South America as a whole. Santiago is likely to entrench its status as the major gateway for Australians travelling to South America. Particularly, once Qantas and the Latam Airlines Group (operator of LAN and TAM) introduce more modern planes to the route and add on extra flights, something that is likely to happen sooner rather than later. At the same time, it is very pleasing to see that Air New Zealand will be entering this market through the Auckland to Buenos Aires service that it will launch in December. Air New Zealand’s service will introduce some much needed competition to the route and will see Buenos Aires once again figure as an alternative gateway into the region. The service will be able to source passengers from throughout Australia and South-East Asia through the Air New Zealand, Virgin Australia and other partner airlines’ flights that connect to Auckland and, at the other end, through the Aerolineas Argentinas flights that connect Buenos Aires with other capital cities in the region. These expanded air links can only be positive for Australia and for continued growth in the flow of business between Australia and the region. We are delighted to welcome Air New Zealand as our latest Patron Member and wish it every success with its new service, whilst at the same time valuing very highly the strong working relationship that we have had with LAN for many years. We firmly believe that there is ample room for all three airlines and we will strive to work with all of them, because their success is critical to the prospects for expanding Australia’s relationship with Latin America. Another positive development is that, as I mentioned in last month’s newsletter, the slowdown in the resources sector may also result in more light being shone on the opportunities that exist in other sectors. As highlighted in this newsletter, Mexico is attracting increased interest from Australian companies and other markets such as Peru are gradually capturing more of the investment that once would have gone to Chile. E-commerce is booming in Latin America and the inroads made by SEEK, Carsales.Com and Latam Autos, amongst others, is likely encourage more of our companies to take a closer look at the region. As I have attempted to highlight in the past, there is much more to Latin America than just resources. There is a growing middle class that wants and can consume many of the products and services that Australia has to offer. The region has an urgent need for the type of infrastructure that Australia can help to build and finance. In simple terms, Latin America has to address many issues that Australia dealt with many years ago, and this means that our experience and capabilities place us in an ideal position to be involved in the process. It is hard to quantify the growth in connectedness between Australia and Latin America, but I have no hesitation in asserting that there is ample evidence to show that the commercial links are growing by the day and at a healthy rate. More Latin America-focused events are taking place in Australia and they are being arranged by a growing number of players. More business missions to the region are in the pipeline and their focus is broadening into new sectors. The ‘slower growth’ environment demands greater efficiency and more astute management. Everyone needs to be more focused on what they are doing, but those businesses willing to invest the time to investigate what Latin America has to offer are finding worthwhile opportunities. With proper research and planning, profits can be made in the region. Jose Blanco Chairman ↑Return to Index



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Opinion: ‘Mexico and Australia: New era for natural partners’

(This article was written by Chris Rodwell (pictured below), Austrade trade commissioner for Mexico, Central America and The Caribbean)

The Australian business community is just starting to recognise the increasingly significant role Mexico will play in the global economy in the next few decades. Few if any countries are executing as ambitious a reform program as Mexico right now. The program will prompt a transformation in international trade and investment for the country. OECD secretary general Jose Angel Gurria commented in January that Mexico’s reform program is the most extensive and ambitious that had been seen in the OECD in recent times and possibly the most extensive and ambitious in the world. The OECD forecasts Mexico will average an additional one per cent growth per year for the next ten years. Should it implement other reforms it could arrive at an additional two per cent growth per year. The program encompasses energy, telecommunications, finance, tax, infrastructure, education and more. Add the prospect of the Trans Pacific Partnership (TPP) and Mexico’s existing tranche of trade agreements, covering 45 different countries and including NAFTA and the Pacific Alliance, an enhanced commercial relationship between Australia and Mexico is almost certain. For instance, BHP Billiton has entered the market in search of opportunities in the deepwater of Mexico following the overhaul of 76-year old legislation that had previously closed the energy sector to international investment. WorleyParsons has entered with similar intentions and a view to developing business downstream. Macquarie Group manages the largest fund for commercial and industrial property in the country and also has a lead interest in a US$1billion greenfields wind farm project. More recently, Melbourne-headquartered IFM made its first investment, a US$600 million stake in a major toll road.

The fundamentals of the Mexican economy are strong. Goldman Sachs forecasts Mexico will be a top 5 economy by 2050 and few dispute it will enter the top 10 by 2030. One reason is Mexico’s central bank has been an astute manager. In early 2014 Moody’s lifted Mexico to an A-credit rating. With international reserves nearing US$200 billion and low debt-to-GDP ratios, Mexico’s economy is solid. It is determined to deal with productivity issues. Mexico is challenged by significant infrastructure gaps. But it plans to invest north of US$550 billion in the next five years to fast-track the delivery of roads, rail and pipelines.

There has also been significant education reform but much more needs to be done. In response, Mexico is creating mega-programs to combat skills deficits. Recently announced 60,000 scholarships in the energy sector is an example of the country’s commitment to break the 20-year bind of stagnant productivity. There are pressures to manage in funding new programs. The tax base is narrow and small compared to other OECD nations. While the government has hedged its oil price for 2015, should it remain deflated until 2016 budget cuts will likely be made and a second round of fiscal reform may be needed. On the upside Mexico is a huge manufacturer. It is the engine room of the Mexican economy and accounts for 80 per cent of all advanced manufactured exports in Latin America. It is the number one producer of flat screens and refrigerators in the world and the fourth largest exporter of motor vehicles. Having the US as a neighbour has advantages, especially as the US economy is trending back to four per cent GDP growth a year. Announcements of new car production plants are as common in Mexico as taco street vendors. Just before Christmas General Motors announced it would invest a further $5 billion in Mexico. This comes on top of recent announcements from Kia, VW and Mercedes. The opportunities produced by such investment are apparent for Australian companies looking to new markets as a result of the structural overhaul of the local industry. Austrade is working with companies to determine how to penetrate some of the global value chains in Mexico.



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Mining is also a sector of interest for Australia. While deeply embedded in other parts of Latin America, Australian companies are underrepresented in Mexico, despite the country being the fifth most popular destination for mining investment in the world. In September last year, Rio Tinto, announced a joint venture with mining exploration company Azure Minerals to explore for copper in Mexico.

The other strategic opportunity for Australia is in agriculture. Mexico and Australia share similar ambitions in improving the productivity of their land. We also produce many of the same commodities and face the challenges of flood and drought. Yet it is unlikely we will ever be great competitors. The margins and demand from Asia are too enticing for Australia to contemplate anything but niche plays into Mexico. The greater opportunity exists for shared investment plans in both countries, recognising Australia’s privileged position as a gateway to Asia and Mexico’s

similarly held status in the Americas. In the medium term, expect greater commerce in consumer goods and health. It surprises most to learn Mexico is the fifth largest market for luxury brands in the world. That’s a clear marker for sectors such as our wine industry. While Mexico has traditionally been the land of tequila and cerveza, the red wine segment is growing at 14 per cent per annum in value terms. That’s why 10 Australian wine producers visited Mexico for Australia Day this year to develop the market. In terms of health, Mexico’s population is 120 million and it has a fast rising middle class. Those numbers, coupled with a zeal for better health and an addiction for sugar that recently led to the introduction of a sugar tax, is evidence of the scale of the opportunity. While Australia fosters an ever-more expansive view of global commerce, Mexico represents a compelling opportunity, both in its diversity and scale. It is, by any standard, a much underdone relationship. But it’s also a pivot for Australian companies keen to manage risk in Asia and develop new markets. If ever Australia was looking to recruit a ‘natural partner’ Mexico would surely be on the shortlist. ↑Return to Index

Industry Focus: Water

10 new desalination plants likely for Chile’s mines by 2021

Chile's copper mining industry expects its water consumption to surge 66% to 24.6m3/s by 2025, according to a study by the state copper commission, Cochilco. The biggest year-on-year jump is expected for 2020-21, when consumption is forecast to increase 10.3%.

To meet the increased consumption, seawater is expected to increase its weighting in the overall supply, accounting for 36% of water used in the mining sector in 2025, compared with 9% currently. Cochilco expects Chile's mining industry to see at least 10 new desalination projects over the next seven years. Of the total, only three are currently being built. Antofagasta Minerals' desalination plant for its Antucoya copper mine is expected enter operations this year and desalinate 20l/s while also pumping 280l/s for seawater to be directly used in operations. The same company is also building a plant, due to enter operations in 2016, for its Encuentro copper mine, desalinating 20l/s and pumping 115l/s of seawater for operations. The following year, BHP Billiton expects to be able to desalinate 2,500l/s for its Minera Escondida copper mine with the US$3.43bn, 2,500l/s water supply project

(EWS) that includes Chile's largest desalination plant. The other projects are either in the prefeasibility or feasibility stages, but all look likely to proceed.



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The two projects in the prefeasibility study stage are Glencore's Lomas Bayas III plant, slated for 2017, and El Morro's plant, planned for 2018. The former would pump 500l/s of untreated seawater directly into operations and the latter would treat 640-740l/s. The five projects that are in the feasibility study stage include: Minera Can Can's Diego de Almagro plant, scheduled for operations this year, and expected to pump 315l/s of seawater for

use in copper mining processes; Andes Iron's Dominga project would desalinate 450l/s from 2017; Capstone's Santo Domingo project would desalinate 260-290l/s and pump 355l/s of seawater for copper mining from 2018; and Codelco Norte's RT Súlfuros Fase II project would desalinate 1,630l/s from 2018. Finally, Teck's Relincho project would desalinate 700l/s from 2021. If all projects enter operations, Chile would add up to 6,350l/s of desalinated water and 1,565l/s of direct seawater for mining operations.

These projects are proceeding despite the cost of removing all the salt from seawater in Chile being around US$5.00 per cubic metre, which is quite high by world standards. For example, in the US the cost is only US$2.30 and in Mexico US$2.80. This trend has and will continue to impact the mining industry's energy operating costs in Chile, where they are already as high as 14% of total production costs. ↑Return to Index

QLD universities to be centre stage at Water Week Latin America 2015

The University of Queensland and Griffith University, alongside several other Australian water experts and numerous others from across the globe, will be participating in Water Week Latin America 2015 (http://waterweekla.com/en/) due to take place at the Sheraton Hotel in Viña del Mar in Chile on 22-27 March, 2015. The show provides an excellent platform from which Australian institutions and companies can present their expertise to the Latin American market to collaboratively solve global water issues. For details of the Australian delegation, please go to: http://www.austrade.gov.au/local-sites/latam/events/latin-america-water-week#.VOuFSvnF91Y In addition, The University of Queensland will be running a separate panel session titled ‘Water Security for Development: Addressing the water-energy-food nexus’ to present its capabilities in these areas and engage with potential Latin America research partners and education institutions, key regional industry stakeholders and local government officials. The event which is being organised by Trade and Investment Queensland’s Latin American office and Austrade both based in Santiago, Chile will take place on Tuesday, March 24 at 6.00-8.00pm. For more information on how to participate in either of these events or for more information, please contact: [email protected] ↑Return to Index


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Brazil searching for water alternatives

(This article was written by Christian Molinari and was published in BNamericas on February 5, 2015) Unable to control the amount of rain, drought-stricken Brazil is seeking alternative sources and to increase efficiencies. The national government has negotiated a loan agreement with the World Bank's IBRD to fund federal water program Interáguas. Part of those funds will go towards consultancy contracts for wastewater reuse and reducing water loss. According to information on the UN Development Business website, the cities ministry's environmental sanitation department has called for companies to submit expressions of interest for an 18-month contract to formulate a plan of action proposal to implement a treated wastewater reuse policy in Brazil.

Consultancy support will include setting water reuse patterns – defining the physical, chemical and microbiological parameters of each type of water reuse; identifying wastewater reuse potential for each geographic region and watershed; and coming up with financial modeling for wastewater reuse and promoting this reuse. Expressions of interest were due February 18. In a separate process, the cities ministry also called for companies to submit expressions of interest for an Interáguas consultancy contract, whereby the government will seek technical assistance in water loss management and efficient electric energy use in the northeast region's water supply systems. The consultancy is to focus on reducing water loss via institutional modernization

and improved project development capacity; improving internal and external communication to boost program sustainability, governance and continuity; and exchange and replication of success cases. ↑Return to Index

Peru’s first step towards full membership of OECD

Peru's Prime Minister, Ana Jara, introduced the “Programa Pais 2015–2016” (Country Programme 2015–2016) at the National Accord Forum's session on February 3, thereby announcing the country's first step towards becoming a full member of the "Organisation for Economic Co-Operation and Development" (OECD). “It is the beginning of the Peruvian State’s structured linking process to the organization [OECD] by establishing a cooperation agreement for mutual benefit, and represents a recognition of the meaningful progress we have made in terms of economic and social matters within the last years,” Jara pointed out. The Prime Minister indicated the "progress" is focused on enabling Peru to reach a series of standards and practices, which will contribute –through the improvements in public policies' quality- to shorten the learning curve towards economic, social and institutional development, proper governance and to strengthen the rule of law, as well. The cooperation agreement between Peru and OECD will be focused on segments considered as “substantive areas,” according to the priorities of Peru's national policies. The Prime Minister said the work will be done in the framework marked by four general guidelines: 1. Growth with social inclusion. 2. Competitiveness improvement and the diversification of the national economy. 3. Increasing confidence in public institutionalism. 4. Obtaining better environmental results. “All this aims at implementing the best practices and standards to enable us to walk towards a sustainable economic development with social inclusion, promoting the competitiveness and the economic-productive diversification, as well as increasing the efficiency and legitimacy of public institutions' participation in the framework filled with respect for the human rights and environment,” she expressed. ↑Return to Index


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Australian mining automation technology in demand in Chile and Brazil

(This article was supplied by Austrade) Chile and Brazil’s mining sectors are seeking technologies to deliver supply chain efficiencies and increase productivity, providing strong opportunities for Australian firms. Two of Latin America’s largest mining tradeshows - Chile’s Exponor in May 2015 and Brazil’s Exposibram in September 2015 - are set to provide Australia’s highly regarded mining equipment, technology and services (METS) sector with solid platforms to access these opportunities. Australia is considered a world leader in mining automation which enables resource companies to operate more safely and efficiently in remote and harsh conditions, similar to those experienced by Chile and Brazil’s large scale copper and iron ore operations.

While Chile produces one third of the copper in the world, 35 per cent of its mines have operated for more than 50 years. Issues associated with this include lower ore grades, complex operations and higher labour costs. In addition, Chilean miners face high energy costs and increasingly scarce water resources. Daniel Sullivan, Austrade’s Trade Commissioner for Chile, said Chile’s mining sector is seeking expertise and innovative solutions to overcome these challenges and Australia’s METS companies are well placed to assist. ‘There is interest in systems for monitoring safety and the environment; data

mining and statistical analysis; modelling, control and optimisation of mine site processes; predictive and scheduled maintenance and procurement; and robotics and tele operation,’ said Mr Sullivan. Chile is already using Australian automation technology to improve mine efficiency from companies like Immersive Technologies, TSG Consulting and Seeing Machines. Numerous Australian automation companies will also be showcasing their technology as part of the Australia Pavilion at Exponor in Antofagasta from 11- 15 May. In Brazil, which is the world’s second largest exporter of iron ore, manganese and bauxite, and the largest exporter of niobium, the local industry is also facing significant challenges. According to the Brazilian Mining Association (IBRAM), iron ore accounts for 80 per cent of Brazil’s mining exports and provides 30 per cent of global demand, with the balance provided by Australia.

However the local industry is tackling water and energy supply issues, increasing environmental requirements and a need to boost productivity. Kym Fullgrabe, Austrade’s Senior Trade Commissioner for Brazil,

said to address these shortcomings, Brazil’s mining sector is interested in identifying solutions for control and energy efficiency, remote/automated monitoring and control and robotics to reduce expenses while simultaneously driving up productivity. ‘Recent successful experiences in the Brazilian mining industry resulted in gains in competitiveness through process optimisation. A good example is Vale’s S11D project in Carajás in the Amazon region where Vale is developing a sustainable mine of the future,’ Mr Fullgrabe said. ‘“Truckless” transportation will use conveyor belts to move ore around the site with lower carbon emissions, reduced operating costs and greater safety than the truck-based system it is replacing. This is the first time such a solution will have been used on a large scale at an iron ore mine in Brazil.’ Austrade is coordinating Australian Pavilions at both Exponor in Chile and Exposibram in Brazil to help firms access the opportunities. Spaces are still available for Exposibram but are filling fast. ↑Return to Index


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Mining overview: Appetite remains for right deals Latin Resources ASX-listed South American explorer Latin Resources Ltd, has just inked a landmark deal worth $4 million in cash and exploration commitments over the Ilo Este Project with Peruvian mining firm Compañia Minera Zahena SAC. Zahena has previously farmed in to Latin’s Ilo Norte project, and is clearly eager for more as it signs on to this major copper porphyry project with Latin, and to speed up exploration at Ilo Este. With the Binding Term Sheet, Latin will benefit from $1 million in cash and over US$3 million worth of exploration commitments from Zahena – including a 11,000m of detailed diamond drilling over some of Southern Peru’s hottest exploration ground. ↑Return to Index

Orocobre Orocobre has announced that it has secured at least $A50 million for the ramp-up of its Olaroz lithium plant in Argentina. A total of $40 million has been raised through a placement to domestic and international institutional and sophisticated investors, while at least $10 million will be raised through an underwritten share purchase plan.

The placement will see 15.7 million shares issued at $2.55 each to investors, with the price representing a 13% discount on the Australian Securities Exchange share value prior to the beginning of a trading halt entered on January 30. The share placement plan will be capped at $15 million, but has an underwriting of $10 million. Under the plan existing shareholders will be invited to invest up to $15,000,

also at $2.55 per share. Orocobre managing director Richard Seville said the company valued the support of its investors. “We are very pleased with the result of the raising in what are difficult conditions for resource companies,” he said. “We are now well funded to take Olaroz and the company through to the next stage of development, becoming a profitable operating company.” ↑Return to Index

Herencia Resources AIM-listed Herencia Resources has freed up some more cash to develop its Picachos copper project in Chile, offloading one of its non-core assets to a subsidiary of Brazilian group B&A Mineracao. The sale of La Serena should boost Herencia’s hopes of starting production at Picachos this year B&A, which already has projects in the South American country, could pay up to US$4 million for the La Serena copper project in Chile as part of its option agreement with Herencia. This provides a boost for Herencia, which is currently focused on becoming cash flow positive by advancing its Picachos copper project in Chile into first production this year. Managing director Graeme Sloan said: “Whilst the focus has been on advancing the Picachos project toward production by the end of the year, we continue to seek value-add opportunities for our shareholders wherever possible, this agreement is one such opportunity.” ↑Return to Index

Beadell Resources Brazil-focused, ASX-listed gold miner Beadell Resources has left itself plenty of wriggle room and could be set for a far better 2015 than its headline guidance for the year suggests. Beadell is forecasting 2015 sales of between 170,000 and 190,000 ounces at an all in sustaining cost of between US$810 and $890 per ounce. But that output (from its Tucano project) doesn’t take into account potential production from the Duckhead high-grade resources totalling between 35,000 and 45,000oz. A cut-back to access this resource could occur in the second-half of the year following the wet season.



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Beadell will be especially keen to ensure it at least meets its forecasts for the year after 2014 featured production of 166,000oz, a 7% miss on the company’s original guidance of between 180,000 and 200,000oz. That result was said to be due to scheduling of the ultra-high-grade Duckhead orebody. The company has subsequently brought in a new mining contractor, MACA (which started November 1), and material movements in the December quarter were a record 5.4 million tonnes. ↑Return to Index

Troy Resources Australia and Toronto-listed Troy Resources is only a matter of months away from starting production at its Karouni gold project in Guyana after receiving a key licence from the country’s regulators. Karouni is one of a handful of new gold projects set to start-up production in Guyana this year. The gold producer’s mining licence had been issued, allowing Troy to proceed to the “advanced stage of project development”, the company said. This included plant construction and pre-strip mining operations. “The issue of the licence also completes the list of conditions and requirements for Troy’s A$30 million [US$23 million] Tranche B facility with Investec Bank,” Troy said. “With the final stage of permitting now complete, and all major components for construction on site, Troy is now only a matter of months away from commencing production at Karouni,” Troy’s chief executive and managing director, Martin Purvis, said. Last month, Troy received the finalised environmental permit for Karouni, which could produce 633,000oz of gold over a seven-year mine life through a combination of open pit and underground mining. ↑Return to Index

AusQuest Australian-listed AusQuest has completed three separate joint venture (jv) agreements for its Peruvian copper assets. The agreements could see South American copper firms Zahena and Southern Copper earn up to 70% in the Lana, Cardonal and Puite-Colorada projects. In return, AusQuest could receive option payments totalling US$10 million, while up to 70,000m of drilling, worth an estimated US$16.5 million, would be funded by the Peruvian companies.

AusQuest’s managing director Graeme Drew said: “We went into Peru with a long term view and, after more than three years of patient, hard work (including flying an extensive aeromagnetic survey in 2011) to establish and identify a series of quality copper-gold targets in the covered regions of southern Peru, we are now delighted to have secured JV agreements with two of the Peruvian copper industry’s key players, who will be drilling our large-scale porphyry copper-gold targets for the very first time.” The projects, located in southern Peru, have all been permitted, are close to infrastructure and are thought to contain large copper porphyry systems. They are also near to big copper deposits such as Mina Justa, Tia

Maria, Cerro Verde and Toquepala. ↑Return to Index

Hot Chili Hot Chili Limited has announced that its wholly owned Chilean subsidiary company has executed a Memorandum of Understanding (MOU) with Puerto Las Losas SA (PLL) to jointly study the provision of port services from PLL’s facilities located at Huasco, adjacent to the Company’s flagship Productora copper project in Chile. In advance of the execution of the MOU, PLL has been granted a favourable Environmental Approval by the Chilean Environmental Evaluation Service. The approval allows PLL to construct and to operate the new copper concentrate port facilities ancillary to the already existing facility. ↑Return to Index



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Economic Snapshot for Latin America (This article was supplied by LatinFocus and was published on February 18, 2015)

Sluggish economic growth in Latin America reflects recession in Argentina, Brazil and Venezuela Latin America continued to face important challenges at the outset of 2015 with several factors working against the economy, among which are persistently low commodity prices, weak currencies and tepid growth. Economic growth began to pick up some pace in the region in Q3 2014 following a sharp deceleration in Q2. However, economic activity is expected to have grown at a tepid rhythm in Q4 2014 and is foreseen continuing in the same vein through the first half of 2015. This sluggish economic growth is mainly due to the recession looming over Brazil that is expected to continue until Q2 2015. The outright recession Argentina is experiencing is also projected to continue until the first half of 2015, while Venezuela’s total output is expected to continue contracting until the first quarter of 2016. Conversely, economic activity in Chile, Colombia and Mexico is projected to continue growing, albeit moderately, in the coming quarters. Commodity prices were highly volatile at the beginning of the year, with crude oil prices taking centre stage. Following an uninterrupted downward trend that began in July 2014, global oil prices have stabilized in recent days. The stabilization mainly reflects a decline in investment in new projects in the United States, as several U.S. oil companies have announced a delay in new investment plans. Global prices for agricultural products as well as for metals also recovered somewhat from recent lows. Nonetheless, the recent recovery in commodity prices is likely to be short-lived as downside risks persist. Expectations that growth in China will be slower this year could dampen demand for oil, iron ore and copper. Regarding agricultural products, favourable weather conditions in Argentina have offset the negative impact that the drought in Brazil has had on corn and soybean prices. Commodities production is significant in Latin America, therefore a sustained drop in prices poses additional challenges for many of the region’s economies.

Oil producers’ economic woes dampen region’s growth prospects Latin America’s growth outlook was revised down markedly this month. LatinFocus Consensus Forecast panellists slashed the region’s GDP growth forecasts by 0.3 percentage points over the previous month and now see the economy growing 1.2%.

The BBVA Latin American Currency Report [As at 24 February, 2015 - Courtesy of BBVA Bank]



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Growth at this rate represents just a mild improvement over the 1.0% increase projected for 2014. This month’s downward revision was broad-based and reflects reductions in the growth forecasts for 8 of the 11 economies surveyed, including sizable downward revisions for Brazil, Ecuador and Venezuela. Moreover, panellists left their growth estimates unchanged for Chile and Paraguay. Argentina was the only economy for which panellists raised their projection, although it is still expected to experience recession this year. Next year regional GDP growth is expected to accelerate to 2.7%. The sharp drop in global oil prices is taking a heavy toll on oil-producing countries. Panellists lowered their forecasts for oil exporters Colombia, Ecuador, Mexico and Venezuela. In fact, the negative impact of falling oil prices on exporters more than offset the positive effect lower prices have had on importers. In Mexico, the drop in oil prices of over 50% prompted the government to announce a series of cuts to its 2015 budget. In Ecuador, President Rafael Correa’s administration plans to increase non-oil taxes by 16.5% in order to compensate for the dramatic fall in oil exports earnings. Panellists downgraded Brazil’s economic outlook, mainly due to weak domestic demand and political turmoil. Forecasters slashed Venezuela’s projection, reflecting President Nicolás Maduro’s government’s erratic economic policy.

BRAZIL | Economic activity remains in the doldrums amid political scandal Brazil’s economy grew meagrely in Q3 2014 and more recent data suggest that the economy is still struggling. Retail sales recorded the largest contraction on record in December and economic activity hit a six-month low. The weak economic data, combined with a deteriorating outlook for 2015, has put downward pressure on the real, which hit an over-10-year low against the U.S. dollar on 11 February. Meanwhile, on top of the challenge of boosting the ailing economy, the government is under increasing pressure in Congress over the Petrobras scandal. President Dilma Rousseff’s approval ratings have fallen to an all-time low as evidence is mounting that her party was involved in the corruption at the state-owned oil company. Brazil’s outlook for 2015 is deteriorating quickly. Low commodity prices are anticipated to weigh heavily on export revenues and the country is experiencing a severe drought. While the government is focused on boosting growth, analysts are doubtful that the economy will turnaround quickly. LatinFocus Consensus Forecast panellists expect the economy to contract 0.1% in 2015, which is down 0.6 percentage points from last month’s forecast. For 2016, panellists see the economy growing 1.7%.

MEXICO | Sharp drop in oil prices prompts government to cut spending The economy is estimated to have remained on strong footing in the last quarter of 2014. However, economic news was less encouraging at the outset of this year. Manufacturing is off to a weak start and a sharp drop in consumer confidence augurs sluggish household spending in the months ahead. Moreover, the persistent decline in oil prices prompted the government to announce a series of budget cuts in January. The spending cuts total USD 8.3 billion, which is equivalent to 0.7% of GDP, and the energy sector will assume the largest burden of the cuts. The economic outlook for Mexico is positive, although downward risks do persist. If oil prices remain low over the course of the year, they will erode fiscal revenues and may delay or deter investment in oil exploration. Our panellists cut their growth forecast for Mexico by 0.1 percentage points over the previous month and now expect the economy to expand 3.2% in 2015. In 2016, the panel projects that the economy will expand 3.7%.

ARGENTINA | Economy to contract in Q4, but increased reserves provide some respite Argentina’s economy continues to struggle; recent data point to another drop in economic activity in Q4 following the contraction recorded in Q3. Monthly economic activity was weak in October and November and industrial production and exports fell again in December. Meanwhile, in mid-January, Argentina received USD 400 million in the fourth instalment of the USD 11 billion currency swap signed with China last year. China’s financial support, along with capital controls and negotiations with exporters, made it possible for the Central Bank to maintain its reserves above USD 31 billion in early 2015. With increased reserves, Argentina has no urgent need to access international financial markets, so a debt resolution with the holdouts is not likely to come any time soon. Argentina is becoming increasingly dependent upon China; on top of the currency swap, the countries signed a series of investment projects and trade agreements in Beijing in early February. Large macroeconomic imbalances, combined with the government’s unwillingness to make policy adjustments and a deteriorating external environment, suggest that the recession is going to continue this year. Panellists expect the economy to contract in 2015, although they did revise their projections up slightly from last month and now see the economy declining 0.2% this year. Panellists see Argentina’s economy recovering in 2016 with a 2.3% expansion.



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VENEZUELA | Economy firmly entrenched in recession, government unveils new exchange rate system Venezuela’s economy contracted for the third consecutive quarter in Q3 2014, thus confirming the country’s economic decline. On 12 February, the government launched an overhaul of the exchange rate system which includes a new mechanism called Simadi that allows for legal trading of the bolivar. Venezuelan authorities are hoping that Simadi will help ease dollar shortages and counteract widespread black market activity in the country. The sharp fall in oil prices has put pressure on government finances as oil is the main source of Venezuela’s dollar income and this has resulted in large goods shortages. Recession, skyrocketing inflation and falling oil prices are causing Venezuela’s outlook for 2015 to deteriorate rapidly. Against this backdrop, the LatinFocus panel of analysts shaved off 0.6 percentage points from last month’s projection and now see a 4.4% contraction in GDP for 2015. For 2016, the panel sees GDP recovering somewhat and expanding 0.3%.

INFLATION | Brazil pushes up inflation expectations while double-digit inflation persists in Argentina and Venezuela Inflation in Latin America ended 2014 at 12.7%, according to more complete data. This is the highest rate of inflation the region has seen since 1996. Higher inflation in Argentina and Venezuela caused the jump in regional inflation in 2014. LatinFocus Consensus Forecast panellists expect it to rise even further in 2015 and thus revised up their estimate this month. Forecasters now see inflation in Latin America ending 2015 at 13.6%, which is up 0.3 percentage from last month’s Consensus. The upward revision is mainly due to higher inflation expectations in Brazil; Argentina and Venezuela are foreseen recording double-digit rates. LatinFocus panellists expect the regional average to return to single-digits in 2016 and close the year at 9.9%. ↑Return to Index

Colombia seeks to become centre of Latin American music (This article was written by Rebecca Florey and was published in www.colombiareports.co on February 18, 2015)

Colombia’s capital Bogota aspires to become the main business centre of music in Latin America. The initiative, presented by the city’s chamber of commerce, seeks to promote a cluster of music platforms for artists, entrepreneurs, composers and groups, among others, to “communicate and collaborate.” The plan is to “host musical events and export the talent and creativity to the region.”

The collection of Music in Bogota will bring together companies, artists, public and private entities and schools around the culture industry and according to figures provided by the CCB, they represent 3.8% of gross domestic product (GDP) in Colombia and 8% of the world. According to the Inter-American Development Bank (IDB), “the sectors in which the value of their goods and services is based on intellectual property” make up the so-called “Orange Economy”, which in the case of Colombia equals up to $11 billion in 2011. According to the IDB, the “orange economy”, which

includes music, art, design, architecture, among others, represent growth opportunities for Latin American and Caribbean economies, noting that in 2011 this sector made $174 million in profits. The directors of the CBC said that the capital has established five strategic pillars to boost the competitiveness of the cultural industry, such as research, development and innovation, promotion and marketing, regulation and human talent. “We want the actors to strengthen, grow and become more productive, not only for their sake but for the city,” added the director of the CBC. He also indicated that the city has registered more than 400 companies and artists related to this industry. In March 2012, the United Nations Educational, Scientific and Cultural Organization (UNESCO) ranked Bogota as the ‘City of Music’ to promote it “as a tool for socio-economic progress and cultural diversity.” ↑Return to Index


http://www.colombiareports.co/


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Costa Rica to float its currency against the US dollar Costa Rica will allow the value of its currency, the colon, to float against the U.S. dollar after decades of gradually reduced brakes on its volatility, the country’s central bank announced on February 3. Costa Rica implemented a “currency band” in October 2006 after 22 years of small devaluations. The band limited the colon’s value to a range of 500 to 866 per dollar. Central Bank President Olivier Castro said at a news conference in San Jose that under the new system authorities will only intervene when the colon experiences “abnormal fluctuations.” “This strategy will allow a greater flexibility in the exchange rate,” Castro said. “The macroeconomic conditions are adequate for this migration.” Costa Rica’s colon has fallen 4.6 percent against the dollar in the past 12 months to 536 on February 2, as Castro said the currency has been in “de facto float” for a year. The bank sold about $2.8 million this year to stabilize the colon. Costa Rica’s economy will expand 3.4 percent this year and 4.1 percent in 2016, Castro said. The bank will maintain its inflation target between 3 percent and 5 percent for the next two years, he said. ↑Return to Index

Argentina to ease currency controls for importers Argentina's central bank said on February 9 that it would gradually increase the number of authorizations handed out to importers for dollar purchases, in an attempt to quell protests over strict currency controls critics say are choking the economy. Due to tight currency and trade controls, Argentine businesses must apply to the central bank each time they need dollars to finance imports. For three days during the preceding week, the bank refused all requests. Without imports, many firms such as automakers that rely on foreign parts cannot operate at full steam. "The Central Bank will slowly increase the possibility of access to the foreign currency market for importers to cancel out payment promises, while also adopting the relevant measures to avoid speculative manoeuvres," the bank said in a statement. The statement did not specify how it would increase the possibility of access or make clear if the central bank would actually make more dollars available to importers. Previously, Argentine authorities accused speculators of seeking to undermine the peso currency.

Save the date – Melbourne Briefings: The Trade and Industry Development unit of the Victorian Department of State Development, Business and Innovation will be holding the following briefings:

Focus: Brazilian ICT sector When: Monday 16 March, 2015 Where: Level 46, 55 Collins Street, Melbourne.

Focus: Mexican Automotive market

When: Monday 20 April 2015 Supported by: Where: Level 46, 55 Collins Street, Melbourne.

For further details, please contact: George Di Scala - Director, Trade Engagement - Americas

t: +61 3 9651 9916 | e: [email protected]




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Late last year, Argentina's central bank chief Alejandro Vanoli said the government would begin to normalize its currency exchange market in 2015, raising hopes among importers they might have more access to dollars. But so far, there has been no apparent easing in restrictions. Indeed, the year began with a public outcry over a shortage of imported tampons. The government was forced to promise it would keep the supply chain filled. The hard currency crunch stems back to Argentina's 2002 debt default. Largely shut out of global credit markets since then, the government has over the past four years relied heavily on its foreign reserves to finance imports, pay debts and shore up the peso currency. As reserves dwindled, the government introduced currency exchange and import restrictions to protect its stock of hard currency. In doing so, it spawned a vast currency black market. ↑Return to Index

Focus on mine health and safety opens up METS opportunities in Peru

(This article was supplied by Austrade) Australian mining equipment, technology and services are in demand in Peru as the country looks to address mine safety concerns. Mine health and safety is a top priority for the Peruvian Government and the local mining industry. To reduce mining-related fatalities caused by cascading rocks, toxic substance inhalation, and road accidents, the Peruvian Government introduced regulations in 2011 to raise health and safety standards, improve management practices and minimise risk. The regulations have already helped reduce the number of fatalities from 66 in 2012 to 31 in 2014. The Mining and Energy Investment Supervision Agency (OSINERGMIN) is the Peruvian Government authority responsible for supervising major and medium mining companies’ activities and enforcing these regulations. It is focused on improving managerial practices, creating a ‘prevention culture’ and developing policy. Austrade Lima has been supporting OSINERGMIN with these initiatives so the agency can learn and leverage from Australia’s capabilities and experience in mine safety. The need to comply with the regulations has also increased interest among Peruvian mining companies for technology solutions in areas such as occupational health and safety (OH&S) training and equipment; simulation systems and fatigue control systems for drivers; safety monitoring systems; and OH&S policy development and benchmarking. Multinational mining companies have raised the bar for mid-tier and locally owned mines to improve safety standards in their mining operations. Companies such as Xstrata and BHP have replicated safety policies and practices developed in Australia in their Peru operations. ‘The Peruvian Government is focused on fostering closer ties with Australia, particularly in the mining sector where there is a strong understanding of Australia’s expertise both at policy and industry levels,’ said Daniel Havas, Austrade’s Trade Commissioner to Peru. ‘Australia has strong capabilities in safety solutions, technology and policy that can benefit Peruvian miners, contractors and suppliers,’ he said. ‘We are regarded as a world leader in METS and there is a great deal of interest in our mine safety systems and controls. Both government and industry also want to find out how they can adopt some of our OH&S standards and policies, which are among the best in the world.' Australian METS companies will have the opportunity to showcase their mine safety and communication systems and products at Extemin 2015, a major mining technology exhibition being held from 21–25 September 2015 in Arequipa, Peru. Austrade is hosting the Australian National Pavilion for the seventh consecutive year. The space will consist of 36 booths within the International Pavilion Area. Participants will also have opportunities to network with Peruvian and other Latin American mining organisations. Peru is rich in mineral resources. According to the Peruvian Ministry of Energy and Mines, the development and processing of these resources is a vital economic activity that makes up 61 per cent of Peru’s exports, and 14 per cent of its GDP. There are currently 54 major mining projects in Peru, including exploration, construction and expansion projects, with a total estimated value of US$60,938 billion for the period 2014–20.



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This positive outlook of the Peruvian mining industry offers enormous business potential for exporters of mining equipment, technology and services. Register for Extemin 2015, read about the Peruvian mining industry or contact Austrade for more information. ↑Return to Index

Queensland METS players look to Peru The Ambassador of Peru, H.E Luis Quesada, visited Queensland this month to strengthen relationships with Queensland METS firms currently working in Peru and to promote growing opportunities. He also met 85 Queensland firms interested in expanding their operations into the Peruvian market at a breakfast in Brisbane organised by Trade and Investment Queensland.

At the event, the Ambassador gave a wide ranging presentation on current market opportunities in the resources sector in Peru. Leading mining and engineering companies MMG and Ausenco spoke of their experiences in working in Peru on the Las Bambas and Constancia projects respectively. MMG’s presentation gave the perspective of a resource project owner while Ausenco informed the audience of the experiences of an engineering, procurement, construction and management (EPCM) services company. Notable firms in attendance included Deswick, Cardno, Transcale, Bechtel, Akwa-Worx, Thiess, Sedgeman, Rail Skills Australasia and representation from the Sustainable Minerals

Institute. During the breakfast Trade and Investment Queensland announced plans to take a trade mission of METs and mining-related education and training providers to Peru in September 2015. ↑Return to Index

Mexico sets automobile production record in January A record 266,424 automobiles were produced in Mexico in January, up 6.8 percent from the same month in 2014, according to the Mexican Automotive Industry Association, or AMIA. The growth in automobile output "was bolstered by the plants that started operations last year" in Mexico, the AMIA said in a statement. A total of 103,697 light vehicles were sold last month, a figure that was up 21.3 percent from January 2014.

The automotive industry in January experienced "the best level in history for exports of light vehicles in one month, exporting 204,907 vehicles, with 15.2 percent growth," the AMIA said. Exports to Asia and Canada grew strongly, rising 35.8 percent, compared to the 2014 figures for both regions. Sales to Europe and the United States grew 15.3 percent and 13.7 percent, respectively, while exports to Latin America and Africa fell 25.5 percent and 13.5 percent, respectively. "Mexico has an important lag ... that it must deal with," AMIA president Eduardo Solis said, referring to the domestic market.

Mexico is the world’s seventh-largest manufacturer of automobiles and the No. 4 exporter. About 83 percent of the vehicles produced in Mexico are exported, with most of the units going to the United States and Canada. EFE ↑Return to Index


http://www.austrade.gov.au/EventViewBookingDetails.aspx?Bck=Y&EventID=3970&M=283

http://www.austrade.gov.au/export/export-markets/countries/peru/industries/mining


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Industry Focus: E-Commerce Facts and figures on Latin America’s e-commerce market (This article was written by Carlos Duez Escobedo and was published on www.ingenioustechnologies.com on February 6, 2015)

There is no doubt that e-commerce is experiencing a boom in the last years, and it will continue to grow on a double-digit rate. When we analyse the situation in Europe, this double-digit growth is spread all over at a very stable rate, mainly driven by pure online players, who are able to move faster than traditional brands that adapt to the new way of doing business.

If we look at the other side of the Atlantic, the Internet penetration rate accounts for 52% of the population, compared to 70% in Europe, thereby representing a great potential of growth to everything that depends on Internet connection, such as e-commerce. However, do note that Internet connection does not equal to ecommerce buyers, as Latin America is still in the “early adopter” stage. For instance, in Mexico, only 1% of the total population is recognized as e-commerce buyers out of the 49% connected to the internet, adding up to the pile of facts making the potential of this market evident. According to Forrester, the e-commerce in Mexico, Brazil and Argentina will continue to grow at a rate of 20% year-on-year until 2019.

Nevertheless, starting a new venture in Latam will not be as easy as Sunday morning, as competition is fierce. Rocket Internet has already landed with success, setting up e-commerce giants, such as Dafiti and Linio. American brands, such as Amazon or Walmart, have the expertise, brand equity and the resources to stay on top. In fact, Amazon itself registered revenue of US$475 million in 2013 – a whopping 140% increase compared to the previous year. When looking at Latin America, it is important to not to consider it along with Brazil as a whole. After all, Brazil’s large size does have an impact on their figures. For instance:

Online expenditure in Brazil alone is similar to the sum of expenditure in the rest of Latin America

299 out of the top 500 e-commerce sites of the region are from Brazil

In 2013, Brazilian online shops generated a revenue of US$15 billion, which is 3 times more than Mexico and Argentina combined

Brazil is the largest mobile market in the region, with more cell phones than people.

61% of the Brazilian internet users have purchased online (remember what we mentioned above about Mexico’s 1% of online buyers?). As always, the cost of entering the Brazilian market is much higher than the rest of Latin America, for example:

There are 7 different taxes on your income, and they are cumulative, i.e. you can only calculate and pay the 7

th after the

6th

has been paid and so on.

If you are an online store and decide to use cloud services outside of Brazil, be prepared to pay 40% on top of the invoice as an additional tax.

Talent is hard to find and it is more costly than it appears. Brazilian law mandates that no one is allowed to work for more than 44 hours a week without receiving additional pay, and all employees are entitled to a 13

th-month salary and 30 days of paid

vacation per year, costing employers additional 40% in payroll tax. Although entering Latin America is not an easy ride, it does offer unbelievable opportunities to grow at the speed of light for those who dare. The growing trends of Latin America are still at its early stages and the scenario for the next 5 years shows that there is still room for more players that are up to the challenge. ↑Return to Index


http://www.ingenioustechnologies.com/


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Latin America B2C E-Commerce: Potential for Expansion in Online Retail in Latin America

A recent report by Hamburg-based B2C E-Commerce intelligence company yStats.com, "Latin America B2C E-Commerce Market 2014" reveals details about the current state and the potential of online retail markets across Latin America. As the growing number of Internet users in the region grasp the benefits of online shopping, both foreign and local players compete for a larger share of the booming market. Latin America is the fourth largest region worldwide by B2C E-Commerce sales. Two of the emerging B2C E-Commerce markets in the region, Brazil and Mexico, rank among the top twenty countries by the size of the online retail market. Together with Argentina, these countries account for almost two-thirds of all B2C E-Commerce sales generated in the region.

While Brazil is an unquestioned leader in terms of sales, Mexico is ahead of it by annual growth and Argentina tops both in terms of online shopper penetration. Latin America's growth potential goes beyond these three evident leaders. Colombia is forecasted to outpace Brazil, Argentina and Mexico in terms of sales growth in the next five years. Another country with an untapped potential is Chile. Internet penetration in Chile is among the highest in the region and online retail is growing rapidly, with demand staying ahead of local supply. In Peru, Internet users only start to grasp the benefits of online shopping, with concerns about safety of online credit card payment and fears that the product will not be

delivered hampering faster adoption. Venezuela and Ecuador lag behind these countries in terms of B2C E-Commerce sales. In Venezuela, the adverse economic situation and restrictive regulations have negatively impacted the development of online retail, but new regulatory initiatives could reverse the trend and increase online shopping to the relatively large population. In Ecuador, less than 1% of households had experience with online shopping, as of 2014, but the spread of Internet penetration, economic growth and decreasing poverty rates facilitate development of B2C E-Commerce in this country. Mobile commerce is an important trend in this region, as the majority of Internet subscriptions in many countries is now mobile, growing along with smartphone penetration. Mexico is the regional leader in this trend, with mobile shopper penetration being the highest. Furthermore, cross-border online shopping is a significant characteristic of B2C E-Commerce in Latin America. As online retail in many countries in Latin America is at early stages of development, familiar worldwide online merchants, such as Amazon, eBay and Alipay are popular destinations for online shoppers. Nevertheless, several local leaders have already emerged. The regional E-Commerce marketplace operator, MercadoLibre is the most visited website in the retail category across all of the monitored countries. Brazil-based B2W Digital is another important player, especially in its home market, with online shops such as Americanas, Submarino and Shoptime. NovaPontocom, which became part of Cnova N.V. together with Groupe Casino's Cdiscount, operates online shops and marketplaces in the region. Brazil-based online seller of sports goods, NetShoes, is another prominent player. Local store-based retailers, including Colombian Grupo Exito and Chile-based Falabella, are also developing their online channels to take advantage of the booming B2C E-Commerce in the region. Read the full report: http://www.reportlinker.com/p0191554-summary/view-report.html ↑Return to Index

New Zealand to work with Cuba on the medical front in the Pacific (This article was published in February edition of the newsletter of the New Zealand Latin America Business Council)

A cooperation arrangement between Cuba and New Zealand to support Cuban medical assistance in the Pacific Islands has taken place in Wellington at the headquarters of the Ministry of Foreign Affairs and Trade. The document, was signed by acting chief executive of the New Zealand Ministry of Foreign Affairs Craig Hawke and Cuban ambassador Maria del Carmen Herrera Caseiro, marking a milestone in the sustained development of the relations between the two countries.


http://www.reportlinker.com/p0191554-summary/view-report.html


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Following the signing the Cuban diplomat referred to the good progress of the bilateral ties, highlighting some of the recent events that denoted the leap forward experienced in the selinks. Among others, she mentioned the reciprocal visits of the two foreign affairs ministers, the progress in cooperation and support on issues of special priority for both countries in multilateral fora; as well as the celebration of the first official dialogue between New Zealand and Cuba to exchange views on topics of interest in the respective regions and bilateral initiatives. "The signing of this arrangement constitutes a concrete and tangible result of the interest and will of both parties to continue strengthening the relations of cooperation and friendship and is a convincing sample of our commitment to support sustainable development in the Pacific region, "said Caseiro, who reaffirmed the willingness to deepen this cooperation, including the possibility of exploring joint initiatives to support programmes in the Caribbean region. For his part Craig Hawke expressed his satisfaction with the achievement of the arrangement and highlighted the efforts of both sides in its conclusion, highlighting the significance of this step, which he agreed to describe as a milestone in the development of bilateral relations between New Zealand and Cuba. Referring to the importance of the Pacific for his country, he expressed his recognition for the Cuban medical collaboration in the region and Cuba´s prestige in the field of health. The agreement encourages, among other things, English language training for the Cuban doctors who will serve in the Pacific Islands and New Zealand´s support in the air transport of these personnel from Cuba to New Zealand and to the Pacific host country once language training is completed. ↑Return to Index

Uruguay’s new administration seeks more open and frank relations with Mercosur Career diplomats at key embassies, a more frank approach in talks with Mercosur, closer links with Israel and any free trade option with the United States remains frozen, anticipated Rodolfo Nin Novoa (pictured below), Uruguay's next foreign minister as of next March first when the new administration takes office. “Main embassies such as in Brazil, Spain and the United States will have career diplomats, not political nominees as ambassadors, and in Argentina we have named a former Tourism minister who has a deep knowledge of bilateral relations”, said Nin Novoa who underlined trade and investments approach as the main task for those ambassadors and their staff in countries which are Uruguay's leading markets. “Our embassies must be efficient trade offices”. Uruguay currently has an estimated twenty 'political appointees’ in embassies plus a couple of 'roaming ambassadors', displacing professional diplomats. Regarding Mercosur the next administration will try ”an open, frank policy in relations with the group, are we to continue as currently or are we to change and try to accomplish the original objectives of Mercosur?”. However the idea of a free trade agreement as was tried during the first administration of president Tabare Vazquez, (2005/2010) “remains to be seen; time is not ripe, it's hard to see such an initiative moving ahead”. “I've come with clear instructions from President Tabare Vazquez which are to keep looking for, and opening trade opportunities for Uruguay, reaffirming the country's longstanding diplomatic and political policies such as abiding by international law, no meddling in other countries' internal affairs, peaceful solution to controversies, support for United Nations, all those for which Uruguay has been and is acknowledged world wide” ↑Return to Index



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For the diary If you would like to know more about how your company can take advantage of the events that the ALABC will be hosting in 2015, please contact our Marketing and Events Manager, Steph Patrick at [email protected] or Tel: 02 9431 8651 Date: TBA Event: ALABC Perth Dinner Venue: To be confirmed Organiser: ALABC Contact: Steph Patrick, [email protected] Tel: (02) 9431 8651 Date: March 24, 2015 Event: Chairman’s Leadership Luncheon Venue: Brisbane (to be confirmed) Organiser: ALABC Contact: Steph Patrick, [email protected] Tel: (02) 9431 8651 Date: April 15, 2015 Event: Chairman’s Leadership Luncheon Venue: Melbourne (to be confirmed) Organiser: ALABC Contact: Steph Patrick, [email protected] Tel: (02) 9431 8651 Date: May 19-20, 2015 Event: Austmine Conference Venue: Royal International Convention Centre, Brisbane Organiser: Austmine

Contact: Rosie Atherfold, [email protected] Tel: (02) 9357 4660 Date: May 20-21, 2015 Event: Latin America Downunder Venue: Sheraton on the Park Hotel, Elizabeth Street, Sydney Organiser: Paydirt Media

Contact: Lauren Carey, [email protected] Tel: (08) 9321 0355 Please visit our website www.alabc.com.au for regular updates. ↑Return to Index









latam news - alabc - the australia-latin america …€¦ · argentina to relax currency controls...

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