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Bullboard - Stock Discussion Forum iShares MSCI Min Vol Emerging Markets Idx ETF T.XMM

The investment objective of the Fund is to provide long-term capital growth by replicating, to the extent possible, the performance of the MSCI Emerging Markets Minimum Volatility Index (USD) (the Index), net of expenses. Under normal market conditions, the Fund will primarily invest in securities of one or more exchange-traded funds managed by BlackRock Canada or an affiliate (iShares ETFs... see more

TSX:XMM - Post Discussion

iShares MSCI Min Vol Emerging Markets Idx ETF > Another Financial Post article
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Post by wmbjk on Oct 11, 2007 11:32am

Another Financial Post article

Betting on Brazil
Eike Batista is owner of a large iron ore conglomerate in Latin America
 
Karen Mazurkewich
Financial Post

Eike Batista
CREDIT: (National Post/Handout)
Eike Batista

Eike Batista should have been an engineer, but the son of a Brazilian iron ore executive decided to embark on Indiana Jones adventures in the Brazilian jungle.

Mr. Batista, now the owner of MMX Mineração e Metálicos S.A., a large iron ore conglomerate in Brazil, got his start trading diamonds to supplement his allowance while in university, but turned his attention to gold in 1979. "I heard about the gold rush in the Amazon jungle," he says.

The gold play in the untamed frontier consisted mainly of simple garimpeiros, pick and-shovel peasants, tearing across the tops of alluvial deposits. At the peak in the 1980s, they were mining US$70-billion worth of gold. "I came back to Rio and convinced two jewellers in Rio to lend me US$500,000 to buy gold, and that was the beginning of my trading operation," he says.

Not every kid fresh out of university can convince investors to give him $500,000, but Mr. Batista had a big connection in his father. Eliezer Batista de Silva is revered in Brazil for turning the former state-run iron-ore conglomerate Companhia Vale do Rio Doce (CVRD) into an international powerhouse in the 1950s and 1960s by integrating mines with infrastructure. His son bears the famous Batista name, but insists he's a self-made man: "In our culture [nepotism] is very common. But my father never allowed any of his children to be anywhere near anything that was part of CVRD," he says.

Mr. Batista eventually bought up the mining rights to millions of hectares in Brazil, and raised money on Bay Street to front a large-scale mine. His bank backers took over a shell on the Vancouver Stock Exchange called Treasure Valley Explorations Ltd. (renamed TVX Mining Corp. and later TVX Gold Inc.), and raised $12.4-million to buy some of Mr. Batista's claims and fund exploration. His operations would soon start turning profits of US$1-million a month, he says.

He added five other gold mines in Brazil, and the largest silver mine in Chile under the TVX umbrella. No one wanted to touch the La Coipa deposit in Chile, then owned by Consolidated Gold Fields PLC. There were dozens of lawsuits involving local property owners to contend with. Even his own TVX board wanted nothing to do with it. From his own pocket, Mr. Batista purchased the mining rights for US$30-million and paid off the landowners. After sealing the deal, TVX purchased a 49% share in the mine. It eventually grew to US$2-billion in market value, he brags. 

The '80s were good to Mr. Batista, who embraced the playboy lifestyle, taking up Superboat racing. "I wanted to win a sporting competition, but I needed a machine behind me," he jokes. He would eventually be declared the World Champion in 1991. During that time he collected another trophy -- his now-former wife, Luma de Oliveira, a Playboy model, who once led the parade at Rio's infamous Carnival festival.

Having broken speed records on the water, Mr. Batista was now gunning to expand in Europe and Russia. But, he admits, his timing was off. He was hunting gold when prices were dropping to US$250 an ounce. His deals in Russia didn't go well -- then disaster struck. His Kassandra gold mine in Greece was derailed in 2002 after the country's highest court annulled government permits issued to the TVX Hellas SA unit of TVX. "The Greek government that awarded a mining licence then took it away...imagine that," says Mr. Batista.

The Greek bureaucracy, in fact, was responding to a crisis on the ground. Local villagers began engaging in violent protests around the site, arguing that the underground mine was destabilizing the village's infrastructure and that TVX hadn't done a proper environmental assessment. Blockades ensued and at one point protestors torched a TVX drill rig. The Greek government responded by sending in the army - then it went to court.

The experience in Greece "destroyed a lot of value in TVX," he says. The company lost US$330-million in the process, he estimates. He stepped down as chairman and CEO of TVX in 2001 and the company was later purchased by Kinross Gold Corp.

The loss, he says, taught him to divest from gold and refocus on South America where he had originally built his wealth. "I learned from my mistakes," he says. Now he is back with a vengeance.

Mr. Batista's new vision is to take on CVRD by investing $3.6-billion in iron ore mines and infrastructure, including a long slurry pipeline and port projects, including a deep-water port at Acu, near Sao Joao da Barra in Rio de Janeiro state.

That's just for starters. Also on the books is a 6.5-million-tonnes-a-year iron ore in Amapa state near French Guyana, that he says will be linked to an ocean port by a 200-kilometre railway.

The new schemes are mushrooming so quickly, Mr. Batista announced in July that he would spin off the logistics components of MMX into a separate company known as LLX Logistica SA. 

If all his mining and infrastructure activities were not enough, Mr. Batista has also announced that another new company of his, OGX, will participate in the next licensing round for offshore and onshore gas exploration.

"Brazilian businessmen are now plugging into the valuation matrix of the world," he says.

Financial Post
kmazurkewich@nationalpost.com
Comment by jjlalaska on Oct 11, 2007 12:48pm
I am interested, help me out. Is it correct that the market cap is 3.7 mil and only 200k shares out? Also the oil and gas div OGX are they owned by XMM? This is one I would love to learn more about and will do some digging......... jjlalaska
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