São Paulo – Perspectives are the best possible. From the mines of Brazil, US$ 35 billion will be generated in 2010, estimates the Brazilian Mining Institute (Ibram). The result is 45% greater than the performance in 2009, which was US$ 24 billion. The motivation is such that the institute has expanded all its investment forecasts for the period from now to 2014, from US$ 54 billion to US$ 62 billion. The reasons for this expansion are, in the first place, China, where demand for ores is still strong, and the bulk investment in infrastructure in Brazil due to the World Cup and Olympics, in 2014 and 2016, respectively.
"On the domestic market, the reason is expansion of production of inputs for civil construction, like sand, gravel and clay, among others," explained the secretary general for Geology, Mining and Mineral Transformation at the Ministry of Mines and Energy, Claudio Scliar. "The foreign demand, in turn, is connected to the enormous demand for iron ore in several countries, mainly China," he said.
Therefore, there is great need for iron to feed the Chinese locomotive and put in place projects for bridges, roads, stadiums and passenger terminals, among others. This year, the ore should reach production of 370 million tonnes, as against 310 million tonnes in 2009.
Iron, our main mineral commodity, is a good thermometer to measure the growth of the sector in Brazil. According to the Economic Data manager at Ibram, Antonio Lannes, the average price of the ore was US$ 20 per tonne in 2000. Today, it is US$ 125. "Before the crisis, the value was US$ 200 per tonne," he explained. "Demand has grown more than offer," he said.
In this scenery of sector growth, according to Lannes, the country is among the five main global powers in mining, together with Canada, Australia, Chile and Russia. "We extract over 40 ores in Brazil, in an activity performed by around 5,500 companies responsible for 5% of the GDP," said Lannes.
The great extraction capacity in Brazil has helped improve the trade balance of the country. The sector balance this year, in fact, should exceed that of trade as a whole. "The estimate is for the Brazilian trade balance to end the year with a surplus of US$ 16 billion. In mining, the balance surplus should reach US$ 18.5 billion," said Lannes.
Phosphate and fertilizer
The scenery favourable to mining in Brazil even has impacts in the production of fertilizer (made mainly out of potassium and phosphates) responsible for part of the increase in the price of foods in late 2008. As it is the fourth main consumer of fertilizers in the world and imports 91% of its potassium needs and 45% of the phosphate needs, the country has started investing in projects for extraction of these ores, and investment should total US$ 2.5 billion from 2010 to 2014.
In this line, the Fertilizer Work Group was established, with representatives of the Ministry of Mines and Energy, the National Department of Mineral Products (DNPM) and the Mineral Resource Research Company (CPRM). "Among the actions of the Group is the creation of the Phosphate Project in Brazil, whose mission is mapping and expanding national reserves of ores," explained Scliar.
Thus, in a context of research and investment in the discovery of new sources for extraction, opportunities are also good for foreign investment. "We have already been sought by Spaniards interested in drilling mines," said Lannes.
To those abroad and interested in investing in research or management of mineral goods here, the Geology, Mining and Mineral Transformation Secretary at the Ministry of Mines and Energy recommends consultation on the DNPM (www.dnpm.gov.br) and CPRM (www.cprm.gov.br) sites. "There, it is possible to find information on the geological potential and investment opportunities," said Scliar, hoping for further expansion of the disputed Brazilian mining sector.
*Translated by Mark Ament
