INTRODUCTION TO BRIC COUNTRIES

BRIC stands for the countries of Brazil, Russia, India and China. The acronym was first used by Jim ONeill and has since then been widely utilized to pertain in the changes in the worldwide economic landscape particularly with the emergence of these countries as global economic giants. The BRIC nations have become net buyers of gold. Brazil The Brazilian economy ranks as the seventh largest in the world in terms of nominal gross domestic product (GDP) and eight in the world in terms of purchasing power parity. Brazil is the most progressive country in South America. The countrys economy continues to expand with a yearly GDP growth of more than 5 percent. Brazil is seen to rank at least fifth in the largest economies in the global scale in the next decade. The countrys economy has benefited from its macroeconomic stability as well as reduction of debt, building of foreign reserves by Buying Bars of Gold, and commitment to fiscal responsibilities. Although Brazil was badly hit by the global financial crisis of 2008, the economy is in great shape now with a 1.3% increase in GDP in the first three months of 2011. Brazils economy is boosted by mining, agriculture and manufacturing. Russia Russias GDP grew by 3.4% from April to June 2011. Although this percentage is short than what experts had estimated, this does not take away the fact that the Russian economy is one of the most promising in the world market. In 1999, the Russian GDP had its biggest jump of 12%. From 1995 to 2010, the country has posted a steady annul GDP growth rate of 3.3%. India The GDP of India increased by 7.8% in the first quarter of 2011 compared to the same period in 2011. The GDP of India has been on an upswing since 2000 with its quarterly GDP growing by as much as 7.45%. India is the largest importer of gold as of late, and is contributing to the rise of your

gold. In 2003, the country posted a record GDP quarterly growth of 11.8%. The Indian economy is posting an annual growth rate of 7% since 1997, with poverty incidence being cut down by about 10%. The services sector has about half of the Indian economy. China Already considered the second largest economy in the world, the Chinese economy is growing so fast it is seen to bump off the United States in a decade or so. In 2009, the Chinese GDP grew by 9.3% reaching a total of about $159 billion. The trend continued in 2010 with the Chinese economy posting a 11.9% increase in the first quarter. In 2011, the red-hot economy slowed down by a couple of points to 9.5% down from the previous years mark of 9.7%. The economy is largely dependent on the manufacturing and electronics sector, with the service sector slowly being developed.

BRIC PRODUCTION AND CONSUMPTION OF METALS

Demand for natural resources in the emerging world is increasing, but how much of this increased demand is met by the country's own production? The interesting chart from Bank of America-Merrill Lynch shows the supply/demand fundamentals of several key industrial metals and basic materials. The dotted line represents a key tipping point. The resources to the left of the line are those the BRIC countries must obtain outside of their own borders in order to meet domestic demand. BRIC refers to the emerging market countries Brazil, Russia, India and China. The BRICs produce an excess amount of the two metals to the right of the line and export the remaining amount to other countries.

In the previous year, copper, nickel and coal were all top-half performers of the 14 commodities. The two metals the BRIC nations produce an excess amount of (aluminum and zinc) were among the worst-performers. These materials are the necessary elements needed for emerging nations to take the next steps in their development. You can see that the BRICs must rely on imports in order to meet demand for metallurgical coal,

copper concentrate, thermal coal, iron ore, refined copper and uranium. For example, BRIC production of metallurgical coal is less than 20 percent of BRIC consumption. Met coal, or coking coal, is used to make iron and steel -- very important to the infrastructure build-out taking place in Asia. Thermal coal is also important because it is principally used for power generation. Coal is the primary source of electricity in the emerging world, supplying more than 50 percent of Asia's power. The BRICs consumed nearly 2 billion tons of coal for electricity in 2009, according to BP's World Energy Statistics.In order to combat these supply deficiencies, the BRICs have looked beyond their borders. In India, there were 27 cross-border deals in the metals and ores sector last year, according to research firm Grant Thornton. China has been especially proactive in this regard. From 2005 through early 2010, the country inked more than $45 billion worth of cross-border deals for coal, copper and iron ore. These are deals in countries near (Vietnam, Mongolia) and far (Peru, Canada).