JC warns: "Roger Agnelli almost bankrupted Vale"
João Carlos Cavalcanti, a geologist who made the biggest mineral discoveries in Brazil in recent years, warns the market about the megaproject of André Esteves, from BTG Pactual, and Roger Agnelli: "It won't work"; he recalls that, at Vale, Agnelli tried to buy Xstrata for US$ 90 billion and was prevented by Dilma.
247 – Geologist João Carlos Cavalcanti knows his stuff. In recent years, he has built fame and fortune by discovering the largest deposits of iron ore, nickel, phosphate, aluminum, and, more recently, neodymium ever known in Brazil. Billion-dollar projects by the Mittal group in Caetité, Bahia, and Votorantim, with Sul-Americana de Metais in Minas Gerais, are currently based on his findings. The first professional in the sector to point out the oil and gas bubble that engulfed Eike Batista's OGX, which is paying the price with the collapse of its stock market value for failing to deliver the spectacular production promised to the market, JC now foresees a new failure in the area of exploration of Brazil's underground resources.
“This deal being made between Roger Agnelli and André Esteves isn’t going to work,” he asserts regarding the recently formed B&A Mineração, a partnership between Agnelli’s AGN Agroindustrial and BTG Pactual Participações. “Capital with capital, without work, doesn’t generate wealth; it’s the homosexuality of business activity,” he quips. Known for his outspoken opinions, the geologist is now a source of information for the world’s leading business media outlets.
JC's criticism centers on the direction Agnelli is expected to take with the new business. "He's not a geologist, he's an accountant. He's going to get bogged down with what he has ahead of him," he predicts. With US$520 million in capital, B&A states that it will "explore investment opportunities in the mining sector, focusing on Brazil, Latin America, and Africa." It's already certain that some of the money will be used for acquisitions. "Agnelli's partners need to be careful," JC warns. "At Vale, he tried to buy Xstrata (an Australian mining company) for 90 billion dollars; it was Dilma who stopped him," he recalls. "Vale would have gone bankrupt right there." Shortly after the formal purchase attempt in 2008, when the Brazilian mining company, then headed by Agnelli, even went public to raise capital, Xstrata lost substantial value and was valued at US$10 billion. Earlier this year, it was sold to Glencore for US$26 billion.
JC, it must be said, is good at predictions. Besides the mineral discoveries that made him one of the richest men in the country, he anticipated the financial market by predicting that Eike Batista's oil and gas ventures, through OGX, were caught in a bubble of overestimations. "The market bought Eike's blue eyes and not what he actually has to sell," JC told Bloomberg. Now, regarding his outlook on the future of B&A, it's worth remembering the saying: a friend who warns is a true friend.
Below is a news item from Thursday, the 12th, from the G1 portal regarding the announcement of the creation of B&A Mineração:
BTG Pactual announced this Thursday morning (12), in a relevant fact sent to the Securities and Exchange Commission (GVC), the association with AGN Agroindustrial, Projetos e Participações, a company controlled by the former president of Vale. Roger Agnelli.
The partnership will form B&A Mineração, which will explore investment opportunities in the mining sector, focusing on Brazil, Latin America, and Africa.
The projected investment will be US$520 million to fund the business plan, development, and organic expansion through acquisitions of the new company.
The completion of the transaction is subject to the verification of conditions typical for this type of business.
The partnership announcement comes after BTG Pactual Participations sold its stake in the oil and gas-focused holding company STR Projetos e Participações em Recursos Naturais (STR RN) earlier this month for 699,7 million reais.