São Paulo – If China is the second main gold importer, it is the main producer, followed by the United States, Australia, Russia and South Africa. Brazil is in the 13th place, according to figures disclosed in 2011 and supplied by the Brazilian Mining Institute (Ibram). For comparison purposes, production of the five main producers varied from 190 to 300 tonnes last year, while Brazilian production remained at 55 tonnes.
In reserves, however, Brazil is in the seventh place, behind Australia, South Africa, Russia, Chile, the United States and Indonesia. According to engineer Mathias Heider, gold specialists at the National Mining Production Department (DNPM), Brazil has 2,500 tonnes of reserves of the metal, as well as “an immense geological potential”. According to Marcelo Ribeiro Tunes, the Mineral Affairs Director at Ibram, only 30% of the domestic territory has been “geologically mapped”.
To geologist and economist Luciano Borges, however, regarding gold, the country has missed its opportunity of earning more with the “great mining ‘boom’ of the last decade, and may spend another long while without managing to expand production through new projects.
“Unfortunately, Brazil has already been the main global player and still has one of the highest potentials in gold, but it is currently irrelevant [in terms of production],” said Borges.
The fact is that since November last year the government suspended the approval of new concessions for the opening of new mines, justifying that it aimed to elaborate new regulations for the sector. That is valid for mining, not just for gold. The project left the Ministry of Mines and Energy, is now in the Chief of Staff’s office and should later be forwarded to the National Congress.
The press office of the Chief of Staff said that the proposal is being developed, but that there is no access to the content and no definite plan has been made for presentation. The companies in the sector complain about the lack of transparency and dialogue on the government’s side.
“The process has been shut up in the Chief of Staff’s office, but we understand that the project, before finalizing, should be sent to the private sector for evaluation and opinions. We have been calling for that,” said Tunes.
Borges states that the lack of information and the delay wards off potential investors in research and production, mainly in the first phase, where the risk to capital is great, as there is always the chance of not finding anything. The volume of research projects that actually become mines is low.
However, according to Heider, the appreciated market stimulates Brazilian production to grow in mines operated by natural people and companies. However, according to Tunes, this is more due to expansion of existing enterprises than to the start of operation of projects that were already in progress when the government suspended the licenses.
“Over the last ten years, production has been growth constantly and has potential to continue growing,” said the Ibram director, adding: “If the suspension [of new licenses] continues, it will end up affecting [the sector] in future. Our hope is that it will be solved as soon as possible.”
One of the projects under development that may start operating in the near future is one by Canadian mining company Colossus, in Serra Pelada, Pará. The largest open air mine in the world in the 1980s, which attracted crowds of prospectors from all over Brazil, the site is now the setting for a deep dig to reach gold that can no longer be extracted by hand.
ANBA visited Serra Pelada in October 2010, when construction of the mine was in its early days. At the time, executives and entrepreneurs informed that production should start in late 2011, but that did not take place. Expectations are now for mid 2013.
“The former director precipitated herself on providing information, as what was said previously did not exactly reflect reality,” pointed out the company by email. “Normally, construction of an underground mine the size of the one in Serra Pelada may take three to four years for conclusion,” he added.
Expectations are to process 1,000 tonnes of ore a day, but the volume of gold extracted from that is yet to be defined. In the area there are a few grams of gold per tonne of material mined. “We can notice, through tests, that the volume is very robust and also immensely variable according to the area inspected,” said Colossus.
Will there be time to make use of the current setting in the gold market? The company answers that every mining company “tries to optimise its operations to make use of commodity price fluctuation.” “However, plans in mining normally do not change so fast,” said the company. But Colossus supports the thesis that, in the face of the international scenery, the demand for the metal “has great chances of remaining and it is very probable that we will see continued price increases.”
*Translated by Mark Ament
