International Commentary

The mining industry in Argentina continues to expand following a sustained upward
trend. Nevertheless, there are a significant number of mining projects throughout
Argentina that have not reached their full stage of development.

While companies still experience the effects of the regulatory changes in general
investment legislation and in specific mining-sector legislation in the early
nineties that favored a significant increase in foreign investment in the
industry, the mining sector's growth is propelled by local demand for mining
machinery and equipment.

Most of the 130+ companies with operations in Argentina reduced their activity
level significantly during the recent world crisis in order to preserve their
assets. Most of the market players are junior companies; however, sector dynamics
and industry experts argue that investments will continue to evolve in favor of
foreign suppliers in the marketplace.

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Colombia is the 22nd largest market for U.S. metal and ore exports.
Estimated duties paid on exports of U.S. metals and ores to Colombia were over
$132 million from 2008 to 2010. Tariff elimination could allow U.S. firms to
reinvest in technology and production improvements.

More than 84 percent of U.S. metal and ore exports to Colombia would receive
duty-free treatment within five years of implementation of the new "U.S.-Colombia
Trade Promotion Agreement"; Colombian metal and ore tariffs currently average 9.2
percent, ranging up to 20 percent.

Colombia would eliminate its tariffs on 69 percent of U.S. non-ferrous metal
exports immediately upon implementation of the trade agreement.
Tariffs on an additional 23 percent of exports would be eliminated over five
years, and tariffs on the remaining 8 percent of exports would be eliminated over
ten years.
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The mining industry is projected to be the leading economic driver for the Solomon Islands this year. This is especially the case in 2012 since the country's mineral production is expected to double that of last year. It was reported the mining industry is a significant employer in the country and second only to the palm oil industry. A new mining lease for nickel last year will extend other mining activities mineral sector.

In addition, Foreign Direct Investments approvals for investment in the mining sector last year totaled 15 applications for mineral prospecting. Western, Isabel and Guadalcanal provinces were the main target areas for mineral prospecting companies though some companies also showed interest in other provinces. Meanwhile mining activity, in line with the scaling up of production at the Gold Ridge mine is expected to contribute 2.3% of the growth in 2012. Russia is actively seeking to attract Chinese investment in Far Eastern Russia
and Eastern Siberia.

As part of last week's Sino-Russian trade and investment meeting in Moscow, Chinese deputy prime minister Li Keqiang took part in the signing of 27 agreements between Russian and Chinese companies. Although most of the agreements had in practice been finalized a long time before, they were publicly formalized at the meeting. The $15 billion deal package provides insight into just how rapidly economic relations between Russian and China are developing.

The state Russian Direct Investment Fund (RDIF) agreed with China's sovereign investment fund, China investment Corporation (CIC), on the establishment of a joint investment fund by the end of July. A memorandum of understanding on creation of the new fund was signed by the parties last autumn. RDIF and CIC will
initially invest $1 billion each. Other Chinese investors are expected to follow with another $2 billion in investment. The fund would direct 70 % of investment to Russia and other CIS countries. The remaining 30 % would go to Chinese firms working in cooperation with Russian firms. The first in- vestments will go to
companies involved in the machine- building, forestry, agriculture and transportation sectors.

The Russians expect the new fund to attract hundreds of millions of dollars in investment already this year. Russian officials note that China offers Russia a relatively inexpensive source of long-term financing, as well as unique skill sets. Russia, in turn, offers China large state-supported investment projects, particularly in development of natural resources in Eastern Russia. In his discussions with Li Keqiang, Russian deputy prime minister Igor Shuvalov said the Chinese were welcome to invest in projects in Eastern Siberia and the Russian Far East, for whose development Russia was creating a new state corporation. Cooperation in the energy sector has not proceeded as hoped. After many years of wrangling over pricing schemes, Russia's state-owned oil company Rosneft last year finally began to supply crude oil to China by pipeline. The Chinese, however, continued to insist the price was too high, and Rosneft lowered the price earlier this year. Russia's prosecutor general office is now investigating the deal due to a complaint claiming that the decrease of the price results in
lost profits to Rosneft and harms Russia's economy.