A US$80bn bid by Brazilian miner Vale for Xstrata may be blocked by the Brazilian Government amid fears it could halt investment in the country's resources industry, according to Brazil's politicians.
In an investigation by The Times newspaper, politicians have revealed their worries over Vale's international aspirations, which they fear could jeopardise the domestic mining industry.
According to the Brazilian press, Vale has secured about US$50bn in financing from banks including HSBC, Lehman Brothers and BNP Paribas to buy the Anglo-Swiss miner.
The government is able to block the bid as it controls over half of Vale's shares through BNDESPar, an investment holding company for the state development bank, and Previ, the pension fund for state-run Banco do Brasil.
Meanwhile, Xstrata's copper division has announced a 28 percent increase in total estimated mineral resource at its Collahuasi copper mine in Chile, one of the world's largest copper deposits.
A successful drilling programme in 2007 boosted resources to the equivalent of an additional eleven million tonnes of contained copper metal, Xstrata says.
The mineral resource includes ore reserves of 2.20 billion tonnes at a grade of 0.82 percent copper and a 25 percent increase in tonnage from ore reserves of 1.76 billion tonnes at 0.89 percent copper to the end of last year.
By staff writer
