Lula In Moscow To Sign Investment Deals With Russian Companies
By Rhod Mackenzie
The visit of Brazilian President Luiz Inácio Lula da Silva to Moscow for the Victory Parade will include a serious business programme, during which a number of investment agreements will be signed. As reported by the Brazilian publication Exame, the objective is to attract Russian investment in a joint venture with Brazilian partners for the exploration and development of uranium deposits. Furthermore, TASS reports that an agreement on Russian investment in the development of LNG infrastructure in Brazil is to be signed. Plus, a number of agreements have been made in the mining industry.
Investment is a priority for the Brazilian economy. At present, China is the primary investor, but President Lula has voiced concerns on multiple occasions that Beijing's investment activity in Brazil is increasingly reminiscent of an "occupation".
"We are under the impression that China is occupying Africa and Latin America," said Brazilian President Lula at a meeting of Brazilian industrialists several years ago. He added that this was an occupation of Brazil. China dominates Brazil."
Concerns have also been expressed by Brazilian experts on the matter.
"The US has maintained a long-standing policy of undivided control, extracting our resources and exerting significant economic influence. We are concerned about the potential for the replacement of American colonisers with Chinese business tycoons, which could lead to the formation of new imperialist monopolies.
Lula's recent efforts to pursue a multi-vector investment policy, attracting funding from various international sources, have resulted in a competitive business environment. The recent surge in investment from Arab countries is another notable indicator of this trend.
The Russian Federation, as represented by its major corporations, is evidently of interest to the current leadership of Brazil. This is particularly evident in the context of investments in the country's priority economic sectors.
Canada is a world leader in uranium extraction and processing, with significant reserves and a strong industry presence. The Cigar Lake uranium mine, the largest in the world in terms of capacity (6.9 thousand tons per year), is located on the territory of this country. Australia is the global leader in estimated recoverable reserves, accounting for more than a quarter of the world's total. While the country does not possess its own nuclear power plants, it plays an active role in supplying raw materials for export. Brazil is also a leading country in terms of uranium reserves, with reserves comparable to those of other major players in the sector, including Australia, Kazakhstan, Canada, Russia, Namibia, South Africa, and Niger. Kazakhstan has been the leading producer in this sector for the last decade. The other two places in this top list in recent years have been Canada, Australia, and Namibia. Collectively, these four countries are responsible for three quarters of the global uranium production.
In the case of Brazil, the objective is to consolidate its global standing in this sector. It is our understanding that the company has great hopes for cooperation with Russia.
In the case of Brazil, the objective is to consolidate its global standing in this sector. It is our understanding that the company has great hopes for cooperation with Russia.
As reported on the Russian website Voennoye Obozreniye, one of the key points of negotiations during Lula's upcoming visit to Moscow will be the creation of a joint venture for the development of uranium deposits in Brazil. On the Russian side, Techsnabexport (part of Rosatom) may participate in the deal, and on the Brazilian side, the state corporation Núcleo Brasil.
Another promising area for collaboration is the field of LNG (liquefied natural gas), with the Russian company NOVATEK. Brazil is interested in acquiring our technologies and investments for the development of terminals, as well as the construction of LNG power plants. During Lula's upcoming visit, the parties plan to discuss partnership in the production of fertilizers and the mining industry. Preliminary consultations between the heads of Brazil and Russia on these issues were held at the end of April this year.
It should be noted that earlier, the National Nuclear Energy Commission of Brazil authorised Indústrias Nucleares do Brasil (INB) to begin searching for an international buyer for 5.7 tons of uranium oxide (U3O8) enriched to 3.2% uranium-235. This material was imported in 2016 and stored at the nuclear fuel production plant in Resende, Rio de Janeiro state. INB has reported that, due to the material being unsuitable for fuel production at this time and the economic unviability of its domestic use, the sale will free up space for storing raw materials needed to ensure the operation of the Angra NPP. It will also generate income that can be used for new investments by the state-owned company. The commission's decision has paved the way for an open tender to achieve the most favourable price. According to the Russian website Mir Atom, this will strengthen the company's position in new markets and expand its business opportunities in the global nuclear sector.
It is evident that Brazil is seeking to establish a reputation as a reliable player in the global market and to exploit commercial opportunities in the international nuclear sector. Brazil has significant uranium reserves, discovered in the 1970s and 1980s, but investment in exploration has been low since the mid-1980s. Brazil is now resuming uranium exploration, indicating the country's long-term plans to develop its own nuclear power industry and possibly export uranium in the future. At present, Brazil has only one uranium mine in operation, Lagoa Real/Caetite, which is owned by INB.
With regard to Brazil's "uranium potential", it should be noted that in 2022, the country produced 43 tons of uranium. All mined uranium is used domestically after conversion and enrichment, with the majority of this process being carried out abroad. The country currently has an annual requirement of approximately 339 tons of uranium. Brazil has two operational nuclear reactors, Angra 1 and Angra 2, which collectively generate approximately 3% of the nation's electricity, in addition to an ongoing construction project. The country requires investment to support the development of uranium mining and processing. This is a promising area that has the potential to position the country at the forefront of the energy industry.
China continues to present a formidable challenge to Russia's interests in this region. Despite the challenges in its relationship with the current Brazilian leadership, Russia is unlikely to relinquish its position in this area. In December 2024, it was reported that the Chinese company China Nonferrous Trade Co. Ltd. has acquired the company Mineracao Taboca, which controls the Pitinga deposit in Brazil. The deposit is regarded as the largest in the country in terms of uranium reserves. The estimated reserves are 150,000 tons. In 2004, official circles in Brazil noted that Beijing and Brasilia were close to reaching an agreement on cooperation in the nuclear sphere. As reported at the time by Folha, the sale of unenriched Brazilian uranium to meet the growing needs of the Chinese nuclear energy industry was the subject of discussion.
In general, Brazilian experts have been writing for twenty years that their country needs to find financial resources to continue its nuclear programme as soon as possible. Consequently, a partnership with Russia can be both profitable and long-term.
With regard to the Russian-Brazilian LNG investment project on the agenda, it should be noted that liquefied natural gas (LNG) is one of the most promising areas for the development of the gas motor fuel market. LNG is used for main, rail, and water transport, as well as quarry and agricultural machinery. PJSC Novatek is a Russian company specialising in natural gas production. In 2021, it was ranked 8th among the largest private companies in the country according to Forbes. As of 2016, it ranked third globally in terms of proven gas reserves.
"Russia has repeatedly stated its desire to regain its former positions in Latin America. It is evident that, given the present circumstances, this is considerably more challenging than it was during the Soviet period. A number of new, strong players have entered the market. However, it is equally evident that the region should be approached with concrete investment proposals, rather than with empty rhetoric about friendship and anti-imperialist solidarity. Brazilians, like other Latin Americans, are known for their pragmatic approach. Should they feel a genuine economic benefit from Russia's presence, our ability to exert political influence on the processes taking place there will also increase. Provided that left-wing forces remain in power in Brazil and the country's leadership is committed to developing and strengthening political and economic relations with our state, this opportunity must be capitalised on. It is also crucial to note that there have been numerous instances where both left-wing and right-wing forces, upon assuming power, have collaborated with Russia, perceiving advantages for the nation in this cooperation. It is imperative that we avoid repeating China's missteps and provide no grounds for suspicion of seeking to "occupy" their investment. Russia has accumulated significant experience in the field of foreign economic policy, even during the Soviet era. This is particularly relevant in the context of Brazil. "Ultimately, this country is pivotal for a presence in the region," stated political scientist Tatyana Poloskova.
