This week, Latin American policymakers presented road maps to a low-carbon economic recovery in two different international forums. Costa Rica, for its part, aims to build nodes for different green jobs across the country. These will be meticulously planned according to such factors as energy demand and wind speed, as detailed by a senior official at a United Nations sustainable development forum.
At the Inter-American Development Bank (IDB) annual assembly, Colombian officials mentioned their five-year stimulus plan, which likewise aims to create 114,300 green jobs. “Colombia today is the Latin American country that is leading the energy transition,” said President Iván Duque, adding that the country recently pledged to reduce its greenhouse gas emissions by 51 percent by 2030.
In Latin America, as elsewhere in the world, political leaders are at least paying lip service to making their post-coronavirus economies more sustainable. Preliminary reports on the makeup of stimulus packages around the region suggest that a few are even taking concrete steps toward green job creation. On balance, though, they could do far better.
Vivid Economics’ Greenness of Stimulus Index identified new sustainable investments such as green infrastructure in Argentina, Brazil, Colombia, and Mexico; conservation programs in Colombia; and subsidies for green products in Brazil. Still, each of those four countries earned aggregate negative scores in the index: They have also pumped money toward environmentally harmful products and infrastructure investments, and eased some environmental standards.
A U.N. Environment Program report that tracked recovery measures in the world’s 50 largest economies ranked Chile’s recovery spending the greenest in Latin America. The Chilean government says it is committing at least $1.3 billion to environmentally friendly measures such as installing electric bus terminals and retrofitting public buildings.
Read full article here.
Last week, several green hydrogen projects were announced in Latin America. AES Gener wants to set up a hydrogen production facility in Chile that would require around 850 MW of renewable energy capacity. The Uruguayan government is planning a tender for a pilot hydrogen project for sustainable mobility and the Mexican authorities are reviewing a large scale PV project planned to power a 75 MW hydrogen plant.
Last week, several large scale green hydrogen projects were announced in Latin America, including a US$5.4bn green hydrogen plant under development by Australia-based hydrogen specialist Enegix Energy–a project that is expected to require 3.6 GW of wind and solar facilities and is currently the region's largest hydrogen project.
Other developments announced simultaneously in other Latin American countries last week confirm that the region may become a global hydrogen hub thanks to its considerable solar resources, land availability, and low project costs, which also means the nascent hydrogen sector in the region may immediately gain in scale.
Read full article here.
February 22 (Renewables Now) - Australian renewable energy company Enegix Energy will be part of a USD-5.4-billion (EUR 4.4bn) green hydrogen project in Brazil's Ceara state.
On Friday, the state government and the foreign firm signed a memorandum of understanding (MoU) for the project planned for the state's Pecem Industrial Complex Port. It is expected to be the first green hydrogen hub in Brazil and Latin America, the government said. Enegix Energy is to build the hydrogen production facility.
Thanks to the available port infrastructure, international partnerships and location, Ceara expects to be able to export hydrogen at a competitive price.
The government is also partnering with Pecem port, Ceara's industry federation Fiec and the state's federal university UFC. It has established a task force to enable the structuring of a green hydrogen production chain in the region.
Misguided energy policies threaten its manufacturing sector and the global fight against climate change.
The combustible engine’s end date is firming up: General Motors Co., the largest of the Detroit big three, plans to stop making gas-driven cars by 2035. The global green shift goes beyond vehicles, as hundreds of companies and a growing number of nations pledge to neutralize their carbon footprints. Mexico’s natural bounty in alternative energy sources and its close industrial ties to the United States give it advantages going into this new era. Yet Mexico’s government is squandering them by rejecting the green revolution just as it picks up its global pace.
Mexico’s manufacturing base rests heavily on autos. The factories of Ford Motor Co., GM, Nissan Motor Co., Volkswagen AG, Toyota Motor Co., and other companies fill its industrial heartland and churn out nearly 4 million vehicles a year, making Mexico the world’s sixth biggest producer. Global parts-makers have followed their clients: Aptiv Plc set up with GM, Visteon Corp trailed Ford, and Denso Corp came with Toyota. Mexico developed sophisticated homegrown suppliers, too: Brake and suspension maker Rassini SAB, chassis provider Metalsa SA, powertrain manufacturer Nemak SAB, as well as hundreds of smaller shops that make the basic nuts and bolts assembled into seats, dashboards, mechanical systems and more. The sector is now Mexico’s biggest export driver by far, bringing in $100 billion in annual revenue.
Should Latin American SMEs consider the possibility of exporting their products to Brazil? Yes, because Brazil is the largest market in the region with almost 200 million inhabitants and because in addition to being a member of the Mercosur it has trade agreements with several countries in the region such as Chile and Bolivia, facilitating the entry of products into its territory.
If this information has convinced you to face the challenge of exporting to the verdeamarelho country, then you should investigate the characteristics of the Brazilian market. Below we provide answers to your possible questions.
Chilean miner SQM plans to invest US$700mn in an Australian lithium project in 2021-25.
The project, known as Mt Holland, is a JV between SQM and Australia’s Wesfarmers, which will invest another US$700mn in the initiative.
The parties announced a final investment decision in disclosures on Wednesday.
According to an updated definitive feasibility study, initial concentrator and refinery production will be about 50,000t/y of battery grade lithium hydroxide. Environmental approval for the refinery is pending.
Construction is forecast to start in 2H21 and first production of lithium hydroxide is expected in 2H24, SQM said in a filing with Chile’s securities regulator CMF.
Read full article here
Perth-based retail and industrials conglomerate Wesfarmers has announced it will forge ahead with a near billion-dollar investment to construct a lithium mine in the Western Australian region of Mt Holland.
Wesfarmers told investors after market close on Wednesday evening it had made a final decision to proceed with the investment in the mine and its associated refinery in Kwinana which it is building via a joint agreement with Chilean chemical company Sociedad Química y Minera de Chile (SQM).
The two businesses’ joint venture company, Covalent Lithium, completed a fresh feasibility study on the mine, determining its annual production capacity of 50,000 tonnes of battery-grade lithium, a 5,000-tonne increase on the original planned production capacity.
Wesfarmers and SQM are currently in the process of landing all necessary approvals for the project though final approval is required from the Western Australian Environmental Protection Authority.
February 2021 ALABC E-Newsletter
Dear Members and Friends,
I am please to welcome you to our first ALABC E-Newsletter of 2021. It is great to hear that many of our members are well an on their way to returning to stronger growth. We are looking forward to keeping our members engaged in our upcoming activities and supporting your business expand in this rapidly evolving business landscape.
We recently finished planning our calendar of events for 2021 and as you would expect, we will be-re-instigating our traditional annual dinners in Sydney, Perth, Melbourne and Brisbane. We will continue with webinars throughout the year and hosting boardroom luncheons with Ambassadors, Senior Government officials and business leaders. Our AGM will be held in May and our ALABC-COALAR Networking Day in Canberra is scheduled for October. Please remember to save the dates to ensure you secure your place.
We will also be expanding on our bilateral relations with specific countries in the Latin American region and establishing binational leadership forums with Peru and Brazil, in addition to the one already establish with Chile. The Australia-Chile Business Council is established and if you are interested in joining this binational business leaders forum, please do so by following the instructions here.
With the support of COALAR, we will continue to enhance our digital tools to help our members maximise their networking opportunities as well as providing easy access to data and key insights regarding countries in the region.
During 2021, ALABC will be strongly advocating for a comprehensive globally connected strategy for Latin America. Australia needs to expands its horizons, diversify markets and reduce the dependency on Asia. It is not about the reallocation of priorities, or the broadening of perspective, it's about thinking bigger and being enthusiastic about the world.
We hope that 2021 brings more health and recovery as we strive towards growing the business links between Australia and Latin America. I look forward to connecting with you all.
Chief Executive Officer
Australia-Latin America Business Council
Mexican bill would reform tax law for subcontracted services
November 16, 2020
Mexico’s Executive branch submitted a bill to Congress on November 12 that would reform labor and tax laws related to the tax treatment and legal permissibility of subcontracted services. Given the political context, Congress likely will pass some version of the proposed legal reform and that the effective date could be as early as January 1, 2021.
Subcontracted services are a widespread feature of Mexican business both through third-party personnel providers and, more commonly, through related-party service companies. For decades, Mexican businesses often have maintained their employees in legal entities that are separate from the operating entity.
Additionally, Mexican Labor Law mandates an annual 10% profit-sharing payment to employees. The payment is made directly to the employees and is not a tax. Labor Law bases the payment on the employer’s taxable profits. As a result, an employee´s profit sharing is limited to a portion of the fair market value profit at the legal entity employer rather than the consolidated business profit of a group of entities.
For MNCs that house their employees in a separate legal entity, the proposed legal reform could disrupt various aspects, including legal structure, people planning, income tax and value-added tax (VAT). Companies that provide workforce solutions such as staffing to unrelated parties also should consider the proposed legislation’s impact.
Read full document here.
December 2020 ALABC E-Newsletter
The directors of ALABC were able to share their insights on plans for 2021 and welcome opportunities for potential events next year with our member companies at our virtual end of year drinks. We were extremely pleased to have Jeanne Johns, the Managing Director and CEO of one of our Patron Companies, Incitec Pivot, at the meeting to share their plans with us for the coming year. In addition, we were also very pleased to have Jason Stirbinskis, Managing Director of Los Cerros, Rolf Fandrich, Co-Founder and Business Development Director of Voconiq and Liliana Harris, Business Advisory Partner at Mazars also share insights about their companies over the past year.
I would like to remind our members, that the Australia-Chile Business Council will be starting activities early in the new year and if you are interested in joining this binational advisory group, please do so by following the instructions here.
ALABC has a number of events related to specific industries planned for the coming year that can be viewed in our upcoming events page on our website. Please remember to save the date to ensure you secure your place.
In the next few months, ALABC will be strongly advocating for a comprehensive globally connected strategy for Latin America. Australia needs to expands its horizons, diversify markets and reduce the dependency on Asia. It is not about the reallocation of priorities, or the broadening of perspective, it's actually thinking bigger and being enthusiastic about the world.
I would like to wish everyone a safe and happy holiday period. We hope that 2021 brings more health and recovery as we strive towards growing the business links between Australia and Latin America. I look forward to connecting with you all in the new year.
Read Full Newsletter Here
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