Rio de Janeiro – The mineral industry in Brazil saw a drop in performance in the first quarter of 2022. The data was made public Tuesday (26) by the Brazilian Mining Institute (IBRAM), the entity that represents most companies in the sector in the country. Year on year, the output of 200 million tonnes stepped down 13%, while the revenue of BRL 56.2 billion (USD 11.4 billion) shrank 20%. Exports were down 22.8%.
According to IBRAM, two factors had a major contribution to this situation, as the last quarterly reports posted rising outputs and revenues. The first one is related to China, the leading buyer of ores from Brazil. In the Q1 2021, exports to the Asian giant fell 31%from a year ago. Quarter on quarter, they declined 29%.
“We saw cuts in Chinese steel production related to the Olympic Winter Games. The Chinese government is determined to improve the environmental conditions for holding the sports event. China has also imposed a larger price control,” explained Raul Jungmann, director-president of IBRAM. The entity also draws attention to the isolation measures determined in several cities of the Asian country to fight the pandemic.
The second factor that had a strong influence on the performance of the sector were the heavy rainfalls that took place in January in Minas Gerais. Several operational units were halted as a precaution or for maintenance, thus impacting production. In Pará, output was also below expectations due to problems related to environmental licensing.
The entity points out that, despite the declines in production and revenue, the mineral trade balance, which is the difference between mineral exports and imports, was at USD 6.2 billion. Iron ore, the flagship product of Brazilian mineral production, accounted for 95% of mineral exports in tonnes and 68% in dollars. Furthermore, it was responsible for 58% of the revenue of the entire industry. Gold accounted for 11%, cooper for 9%, and other minerals for 22%.
Translated by Guilherme Miranda
