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China to announce billion-dollar investment in Brazilian port of Sao Luis - sources

China to announce billion-dollar investment in Brazilian port of Sao Luis - sources
China's President Xi Jinping and Brazil's President Jair Bolsonaro pose as they deliver a joint statement after a bilateral meeting during the BRICS summit in Brasilia, Brazil November 13, 2019. REUTERS/Ueslei Marcelino -
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UESLEI MARCELINO(Reuters)
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By Marcela Ayres

BRASILIA (Reuters) – China will make a billion-dollar investment in the Brazilian port of Sao Luis via China Communications Construction Company <601800.SS>, two sources with direct knowledge of the matter said on Wednesday.

Speaking on condition of anonymity, the sources said the announcement will be made at the summit of leaders of Brazil, Russia, India, China and South Africa, the so-called BRICS group of emerging nations, who are meeting in the Brazilian capital for a two-day summit.

The deal will be part of the largest foreign direct investment into Brazil this year, one of the sources said, without revealing any figures.

Economy Minister Paulo Guedes said on Wednesday that Brazil is seeking closer integration with China, its largest trading partner, involving not only trade but also investments.

“We had a giant trade agenda, but not so much investment flows. (Now) investment flows are increasing too,” one of the sources said.

A third source said the deal will be a “greenfield” operation, with the Chinese investment aimed at expanding the port and operations. It will not involve the purchase of a local company, but may involve equity stakes changing hands, the source said, also on condition of anonymity.

The cornerstone of the port of Sao Luis was laid in March last year. At the time, China’s state-run news agency Xinhua reported that CCCC led the project with a 51% equity stake in the venture, alongside Brazil’s WPR, construction group WTorre, and investment firm Lyon Capital.

Located in the northern state of Maranhao, the port of Sao Luis serves the central, northern and northeastern areas of Brazil, and is connected by the Norte-Sul/Carajas railway. According to one source, CCCC’s investment will include spending on the railway.

(Reporting by Marcela Ayres; Additional reporting by Lisandra Paraguassu; Writing by Jamie McGeever; Editing by Marguerita Choy)

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