Paul Harper's  Instablog

The plan includes boosting the capacity of it’s existing Camacari facility, which manufactures the Fiesta small car & also upgrading & modernizing the Troller plant that builds utility vehicles, said Jennifer Flake, a spokeswoman, Ford will also invest in infrastructure to bring new models for Brazil, she said.

The auto industry in Brazil, South America’s largest economy, is headed for record sales this year, the country’s automakers association said on Oct. 7. Ford ranks fourth in Brazil, behind Fiat SpA, Volkswagen AG and General Motors Co.

“Ford understands the importance of Brazil and Argentina and they continue to invest in those markets,” Michael Robinet, an analyst at consulting firm CSM Worldwide in Northville, Michigan, said in an interview. “Every automaker is taking Brazil seriously and they should, because it’s a market with an expanding middle class.”

The Camacari factory, in Bahia, northeastern Brazil, will be able to build 300,000 cars annually after the expansion, an increase from 250,000 now, Marcos de Oliveira, chief executive officer of Ford’s Brazilian unit, said Monday.

“This is a very large investment for Ford,” Mark Fields, Ford’s president for the Americas, told reporters at the announcement in Brazil. “We’re investing because we want to continue to grow and to improve our competitiveness.”

Ford has sold 298,134 vehicles in Brazil this year, giving it 9.9% of the market, CSM said. That share is down from 10.2% in 2007 and is less than half of GM’s 20.3%, the firm said.

Third-quarter pre-tax profit in South America declined 49% to 247 million USD as revenue dropped 22% to 2.1 billion USD, Ford said on Nov. 2. The automaker blamed “unfavourable” currency-exchange rates in Brazil and Argentina.

In the last few years, however, the Government has sought to exercise more control over the whole mining sector and earlier this year it set up MonAtom to undertake uranium exploration and mining on behalf of the state, as well as to pursue nuclear energy proposals. It will hold the state’s equity in uranium and nuclear ventures, under the Mongolian Nuclear Energy Agency.

In mid-July, after consultation with the International Atomic Energy Agency, Parliament passed a Nuclear Energy Law to regulate the exploration and mining of uranium and give the state a greater degree of ownership and control of those resources. Along with this the Government set up Dornod Uran, a joint venture company between MonAtom and Russia’s ARMZ to develop two uranium mines in Mongolia — Dornod and nearby Mardai. A Japanese partner, evidently Marubeni, is also expected to be later involved in the work of this joint venture.

The development is of particular interest to Russia due to its proximity to the Priargunsky operations, allowing possible creation of a ‘single infrastructure. At least until mid-August, Canadian based Khan Resources owned a 69% share in the Dornod project, mostly through its 58% subsidiary Central Asian Uranium (CAUC). The balance of CAUC, which holds Mongolia’s only uranium mining license, was owned by MonAtom and ARMZ, each with 21%.

A definitive feasibility study released in March 2009 showed that the $333 million project was sound, on the basis of 24,780 tons of indicated resources, including 20,340 tons of probable reserves. Annual production of 1,150 tons over 15 years from 2012 was envisaged.

However, the Nuclear Energy Agency has announced that the joint venture of MonAtom with ARMZ will develop the project to annually produce about 2000 tons. Khan is uncertain where it stands, having apparently been dispossessed as it sought to negotiate an investment agreement with the Government.

Gurvanbulag is another deposit, about 30 km away, which has been held by the Canadian Western Prospector Group. This March the company agreed to a $25 million takeover by China’s CNNC International, a 74% subsidiary of CNNC Overseas Uranium Holding and through it, of SinoU. MonAtom appears to be positive about this development.