Lukoil has agreed to sell its stake in several oil projects in Kazakhstan to Sinopec for $1.2bn, in the latest of a string of Chinese investments in the country’s energy sector. The Russian company – the country’s largest private-sector oil producer – said the purpose of the sale was to “optimize Lukoil’s overseas hydrocarbon asset portfolio”.

But the deal is also symbolic of China’s rapid expansion in Central Asia, part of Russia’s traditional “sphere of influence”. Continue reading »

Merger this way

Two of Kazakhstan’s largest banks are merging to create Central Asia’s largest lender. The $1bn deal will return the stricken BTA Bank to private sector ownership five years after it was nationalised in a government bail-out.

Kazakhstan’s banks were once a darling of western investors, but the financial crisis led to a string of writedowns and defaults that damaged the country’s image among international investors. Continue reading »

This article originally appeared on ft.com

The central bank of Mexico bought nearly 100 tonnes of gold in February and March, the latest emerging market country to turn to bullion as a means of diversifying away from the faltering dollar.

The purchase is one of the largest by a central bank in recent history. The gold, worth $4.6bn at current prices, is equivalent to about 3.5 per cent of annual mined output. Continue reading »

From the Commodities Note column on ft.com

Mining engineers in the PhilippinesSplashed over half a page of Sunday’s edition of Chilean newspaper El Mercurio was an advertisement attempting to entice Chilean mining engineers to Mongolia to work on Rio Tinto’s flagship Oyu Tolgoi project.

The timing couldn’t have been more appropriate: that day, several hundred bankers, traders and miners descended on Santiago for the largest annual gathering of the copper industry. Continue reading »

The commodity markets have got the Hebei heebie-jeebies – everything from copper to oil to iron ore has suffered in recent weeks on fears that China’s attempts to cool its economy will end up cooling its appetite for raw materials.

Ironically, though, the widely-expected appreciation of the rmb against the dollar is likely to be a small positive for commodities prices. Continue reading »

Short answer: probably not.

The spectacular growth of China’s economy means many commodities markets have seen “China moments” – what happens when the world’s most populous country moves from being an exporter to a net importer of a particular resource (or vice versa in the case of finished goods). Continue reading »