Very strong growth in lending by the state-owned Banco do Brasil (BB) and Caixa Econômica Federal (CEF) underpinned overall economic activity in the 12 months to the end of June this year. Since then, the growth in lending by both of the main public sector banks has slowed. However, much of the newsflow in recent weeks suggests that the government is taking steps so that BB can reinforce its balance sheet: this should allow the bank to accelerate lending growth over the medium term. In essence, the 'credit cannon' is being reloaded. Even in an emerging market, situations where a…

Mexico’s fiscal reform bill, approved by both houses of congress at the end of October and now awaiting the signature of President Enrique Peña Nieto, has not gone down well with the country’s mining industry. The general aim of the bill was to boost non-oil tax revenues to strengthen the government’s fiscal position. Most economists agreed that with some of the lowest general taxation rates in the Organisation for Economic Cooperation and Development (OECD), Mexico definitely needs to strengthen government finances. But Mexico’s mining industry, the biggest in Latin America, says it has been unfairly singled out and is being…

Capital-intensive mining projects involve putting in a lot of money upfront (often quite literally sinking it into the ground), and hopefully starting to reap significant profits some years down the line when production and sales begin. Between those two points - starting a project and making money out of it - there is inevitably a period of risk, nervousness and uncertainty. In some of the more difficult cases when things are not going well, investors must decide whether to go on spending - or to cut their losses. This is exactly the decision confronting the Canadian mining giant Barrick Gold…