RICH PICKINGS: Big in Brazil

Meet Eike Batista. He's from Brazil. He enjoys mining, exotic cars and making money. You may not have heard of him, but he wants to be the richest man in the world by 2013.

And if you think he can't do it, think again.

Last year, according to Forbes magazine, his wealth increased by a staggering $21.4 billion. That's $58 million a day, $2.4 million an hour or just under $580 a second. He is now worth just over $29 billion.

It's an extraordinary rise in any terms. But then again, Eike Batista is not your ordinary entrepreneur.

The Batista empire is build around a variety of interests, including mining (through his iron ore company MMX), energy (though MPX), logistics (through LLX), real estate (through his firm REX) and shipbuilding (through OSX).

(The "x” in all the names represents the mathematical sign for multiplication – we told you this guy likes cash.)

But his biggest asset – and the main reason for his staggering increase in wealth in the last 12 months – is oil and gas company OGX, which he started in 2007 and listed on the Brazilian stock market in 2008.

The company owns some of the best oil fields off the coast of Brazil. It's yet to start production (that's scheduled to happen in 2011) but that hasn't stopped investors piling in. The company's share price is up five-fold since late 2008 and Batista's stake in the business is worth almost $21 billion alone.

In an interview with veteran US broadcaster Charlie Rose in February, Batista was asked how big his fortune could get in 10 years time. Batista didn't hesitate. "$US100 billion,” he said simply.

Batista, whose famous father Eliezer Batista da Silva ran Brazilian mining giant Vale until it was privatised in 1997, started his rise in Germany, where he lived with his German mother between the ages of 12 and 22 and studied metallurgy.

In the late 1970s, he returned to Brazil. To supplement his monthly income, Batista sold insurance door-to-door. He says the stress was formative.

"I think it's very important for young people to suffer a little bit and this stress, having to make up for my monthly costs, was a great experience,” Batista told Rose. "In my education, this stress was very important.”

He eventually went into gold trading, selling $US60 million worth of the precious metal and earning a commission of $US6 million.

Batista then got the bright idea of using his windfall to but a pick-and-shovel gold mine in the Amazon Basin. He then planned to mechanise the mine and make a fortune.

It didn't turn out that way – he badly underestimated problems with the weather, technical conditions and diseases that plagued his staff. Batista was soon down to his last $US300,000 but eventually things started to turn and the mine started to produce profits of $1 million a month.

"The mine was so rich that it was almost idiot-proof,” he told an audience of business leaders in Sao Paulo in 2008.

But there was an important lesson.

"Only work with world-class assets, rich assets, that can afford mistakes.”

Throughout the 1980s and 1990s, Batista was mainly focused on running Toronto-based gold miner TVX, which built mines in Brazil, Chile and Canada. The company's fortunes fluctuated with the gold price, and so did Batista's wealth.

Around 2000 – after some poor investments in Russia and Greece – he made the decision to focus on Brazil and particularly iron ore, gas and oil.

In the last five years, the Batista wealth machine has gone into overdrive. He took iron ore miner MMX public in 2006 and sold two mines two years later for $US5.5 billion to Anglo American. His energy company listed in 2007 and his logistics company LLX (which is building two "super” ports in Brazil) floated in 2008.

The June 2008 float of OGX raised $US4.1 billion; most of the cash remains on the company's balance sheet, ready for investment in further exploration and production opportunities.

Earlier this year, Batista began talking about a potential $US5.6 billion float for his shipbuilding business, although reports this week suggest the float may be scaled back.

So what are the secrets to Batista's success?

Political connections are important. Timing has been crucial, especially in the case of his OGX oil and gas business – Batista managed to buy at auction some of the last exploration rights offered up by the Brazilian government back in 2007.

But he's also been exceptionally good at attracting key talent, often using equity packages taken out of his own shareholdings.

And that formative experience building a gold mine in the Amazon Basin appears to have taught him about the importance of managing each aspect of a project, using a management style that he calls his "360-degree style of thinking”.

"Today most entrepreneurs or CEOs, they are good in some areas but they fail eventually in the legal engineering or the fiscal engineering or the environmental engineering,” he told Rose.

While the piles of wealth Batista has built make him an intriguing character, his life outside of business only adds to the story.

In July 2008 a probe into corruption and tax evasion by Brazil's federal police resulted in Batista's mansion being raided over allegations he smuggled gold and unfairly influenced the acquisition of mining concessions. He denied the allegations and was later cleared.

Also in 2008, Ireland's Independent newspaper reported that Batista keeps an SLR McLaren in the lounge room of his mansion. Bloomberg reported that his former wife Luma de Oliveira was a regular feature of Rio's famous Carnivale and "danced with little on but a g-string and a necklace with the name `Eike'' spelled out”.

Batista has invested in beer, perfume, restaurants and also held the record for the fastest speedboat trip between the Brazilian ports of Santos and Rio de Janeiro.

He's also a great believer in Brazil and promotes the company at every opportunity. As well as building ports, mines and oilfields in the country, he's also building a 250,000 person town in the country. It will be known as "X”.

Some commentators have pointed out that for the moment at least, the bulk of Batista's wealth is on paper only. Many of his businesses are still in the development stage – they are still building ports, ships and oil fields, rather than earning revenue from them.

That might be a short-term view. Batista's oil business has set a production target of 1.4 billion barrels of oil a day by 2019 - by then, who is prepared to bet that the oil price will not be a lot higher than it is today?

The $US100 billion dream does not look impossible.

"I'm a massive creator of wealth,'' Batista said in 2008. "I don't want to be just a paper baron. Wealth is made when you bring the investment around 360 degrees and then invest the cash again."