Feb. 14, 2010 -
PRLog -- Brazil boasts an illustrious mining industry. The Brazilian geology is endowed with a spectrum of metals and minerals - bauxite, niobium, iron ore, manganese, nickel, tantalum, copper, tin and gemstones. In fact, Brazil is responsible for one-fourth of the world's iron ore output and is the fifth largest producer of tin around the globe. The country is the world leader in production of niobium. Moreover, after Canada, it is the largest producer of alluvial diamonds in the Americas. Other gemstones that are mined exhaustively in Brazil include topaz, Paraíba tourmaline, emeralds and amethyst. Global mining majors operating in Brazil include Australia's BHP Billiton and UK-based Rio Tinto, as well as the host nation's Vale (Companhia Vale do Rio Doce, previously known as CVRD). In November 2008, Reuters reported that although the global financial crisis was impacting the minerals sector in Brazil the bulk of a five-year US$57bn exploration programme would go ahead. However, the Brazilian Mining Institute (IBRAN) does believe that the investments may be delayed by 1-2 years. According to Paulo Camillo Penna, the head of IBRAN, the smaller mining companies would be hit the hardest. Indeed, the number of prospecting companies in the Amazon basin fell from 20 at the start of June 2008 to just five in November 2008. However, investment levels remain high among the larger firms, and Brazil already has 60-70 large steel, mining and metals projects lined up. In November 2008, Brazil's Development Bank ( BNDES) approved BRL1.42bn (US$615mn) in financing to global mining giant Anglo American in order for the company to boost nickel production. Anglo American will use the financing to construct a ferro-nickel plant in Barro Alto, in the state of Goias, and to expand the mine in the area. The centre is expected to be operational by 2010, and will have a capacity of 36,000 tonnes of nickel per year. BNDES is providing around 46% of financing for the project. Meanwhile, in February 2009, Anglo-Australian mining major Rio Tinto confirmed that it would sell a raft of South American assets worth US$1.6bn to Brazilian giant Vale, and that it was in discussions with Chinese state-owned aluminium producer Chinalco over the possible sale of up to US$9bn of assets and stakes in strategic operations. In a statement, Rio said that it had signed definitive agreements to sell Vale its undeveloped potash assets, largely comprising the Corumba iron ore mine in Brazil and the Potasio Rio Colorado potash project in Argentina The Companhia de Pesquisa de Recursos Minerais (CPRM) is responsible for basic geological mapping and maintaining mining statistics in Brazil. The country has fairly well-established laws for the management and exploitation of resources, and for the granting of licenses. But the need for permitting a higher number of private players to set shop has gathered voice, prompting the government to reconsider its rules and regulations concerning mining activity. Global overview On page 10 of this report, BMI examines the phenomenon of increased Chinese activity in the global mining sector and what this means for the industry moving forward. Industry Forecast The financial crisis has put pressure on Brazil's exports, with a reduction in the volume of shipments of its top commodities. Demand for iron ore has been particularly hard hit, as China's aggressive absorption of the mineral has fallen dramatically and Brazil's biggest mining company, Vale has been forced to cut output by some 30mn tonnes a year. However, BMI forecasts that Brazil's exports and imports will rise by an annual average of 12.4% and 13.7% respectively, between 2009 and 2013, to US$305.00bn and US$280.00bn. Meanwhile, despite a contraction in real terms in 2008, BMI forecasts that the Brazilian mining sector will return to growth in 2009. By 2013, the market should be worth US$41.65bn, an increase of around 70%.
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