Noble eyes Brazil ethanol, drops China plans

By Nao Nakanishi

HONG KONG (Reuters) - Noble Group (NOBG.SI: Quote, Profile, Research, Stock Buzz) will invest $150-$250 million in ethanol production in Brazil, while dropping an ethanol plan in China for now due to policy changes, a senior official told Reuters.

The plant, its first in top global sugar producer Brazil, continues the company's aggressive expansion in the clean fuels business despite the latest falls in oil prices.

Ricardo Leiman, Noble's chief operating officer, told Reuters the company sees Brazil as the major global ethanol supplier in future, especially as the growing biofuel industry had already pushed up U.S. corn prices <#C:> to 10-year highs.

"If the world needs ethanol in the future on a free-market basis, it will come from Brazil," he said.

"It has the land. It has the labor. It's the lowest-cost producing country in the world."

Leiman said the breakeven for Brazilian ethanol production was a crude price of around $30 a barrel.

Noble was close to acquiring a capacity of about 100 million gallons in Brazil, he said. The company already trades in Brazil, where it accounts for about 10 percent of ethanol exports. It ships the biofuel to the United States after processing it in Carribean countries.

It also has 10 ethanol projects in the United States.  Continued...