"Why China is Pouring Billions into Brazil\u2019s Energy and Oil"

" Why China is Pouring Billions into Brazil\u2019s Energy and Oil \r\nChina has boosted investments in Brazil to new highs, betting on key industries in South America\u2019s biggest economy.\r\n\r\nRenewables, oil and gas, mining, and manufacturing took the lion\u2019s share of Chinese investments in Brazil in 2024, a\u00a0 new report \u00a0by the Brazil-China Business Council, CEBC, showed this week.\r\n\r\nAs Brazilian President Luiz Inacio Lula da Silva is pursuing closer ties with China, Chinese firms more than doubled their investments in Brazil last year, and the South American nation became the top emerging market for Chinese investments, the report said.\r\n\r\nCompanies from the world\u2019s second-largest economy invested a total of $4.18 billion in 39 projects in Brazil last year, most of them greenfield. The value of investments surged by 113% compared to 2023, while the number of projects jumped by 34% year over year.\r\n\r\nThe power sector, mostly solar and wind projects, attracted the biggest share, 34%, of all Chinese investment in Brazil last year. Chinese firms invested $1.43 billion in power projects. The oil industry accounted for 25% of China\u2019s investments, with around $1 billion, showing that even as China is heavily invested in Brazil\u2019s renewables, it also continues to bet on fossil fuel investments.\r\n\u201cIt looks paradoxical, but one does not replace the other. In fact, both advance simultaneously because China still relies on fossil fuels to power its energy transition,\u201d Tulio Cariello, the council\u2019s research director and author of the report, told the\u00a0 South China Morning Post .\r\n \r\n \r\n \r\n \r\n \r\nThe mining sector also attracted a lot of investments, with Chinese firms focused on strategic and critical minerals to better integrate the supply chain for the projects advancing the energy transition, the CEBC report said.\r\n\r\nSince 2007, Chinese firms have invested a total of $77.5 billion in 303 projects in Brazil. The power sector accounted for 45% of all investments, followed by the oil industry with a 29% share, and manufacturing with 8%.\r\n\r\nMajor Chinese oil companies have stakes in Brazil\u2019s prolific pre-salt offshore oil basin, which has accounted for nearly all the increase in Brazilian oil production in recent years.\r\n\r\nMoreover, Chinese firms are looking to gain exposure to critical raw materials globally, and Brazil offered opportunities in this regard.\r\n\r\nFor example, China Nonferrous Metal Mining Group (CNMC) finalized at the end of 2024\u00a0 a deal to buy Brazilian firm Minera\u00e7\u00e3o Taboca, the country\u2019s biggest refined tin producer, for $340 million. Tin is widely used in clean energy technology. Taboca also produces ferroalloys containing niobium and tantalum, which are used in electronics, aerospace, and green energy tech.\r\n\r\nApart from a strategic rapprochement under Lula, Brazil and China, the biggest economies in South America and Asia, respectively, follow similar energy policy paths. Both are big in renewables: no one can beat China in scale of investment and capacity installations, while Brazil leads with a 90% share of\u00a0 renewable electricity , thanks to huge hydropower capacity and soaring solar and wind expansion.\r\n\r\nBut both China and Brazil continue to bet on fossil fuels. China commissions dozens of gigawatts of\u00a0 new coal power capacity \u00a0each year and has directed its state energy giants to boost domestic exploration and production of oil and gas to reduce its dependence on imports.\r\n\r\nBrazil, for its part, is boosting its oil production while it prepares to host the annual climate COP summit later this year.\r\n\r\n\u201cWe are thinking of a \u2018net zero\u2019 that incorporates some years continuing to use oil,\u201d Andr\u00e9 Corr\u00eaa do Lago, president-designate for the UN Climate Change Conference (COP30) in November told the\u00a0 Financial Times \u00a0in an interview in July.\r\n\r\nMeanwhile, Brazil\u2019s state-controlled energy giant Petrobras is getting closer to obtaining an exploration\u00a0 permit to drill in an environmentally sensitive offshore region in the Amazon basin.\r\n\r\nPetrobras has been trying for years to obtain a license to drill in Foz do Amazonas and the wider region known as the Equatorial Margin, which the company\u00a0 believes \u00a0has a significant oil resource potential, especially in light of recent huge discoveries in nearby regions such as Guyana, French Guiana, and Suriname."

"Why China is Pouring Billions into Brazil\u2019s Energy and Oil"

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Why China is Pouring Billions into Brazil’s Energy and OilAMP

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