1 Photos: Shutterstock Votorantim The Strength of Brazilian Mining 212
2 A Positive Outlook for Mining in Brazil 2 Brazil has one of the largest mineral repositories in the world and is an important producer and exporter of high quality ores. That s why Mining is one of the strengths of the Brazilian economy. Shutterstock The Mining Industry is responsible for the positive balance of Brazil s trade, and the outlook of this economic activity is extremely optimistic for the coming decades. Mining Companies in Brazil According to Annual Reports on Mining, DNPM National Department of Mineral Production Brazil reported 7,932 Companies in 21. Their breakdown by region is as follows: MIDWEST: 942 companies NORTHEAST: companies NORTH: 439 companies SOUTHEAST: companies SOUTH: 1.91 companies BRAZIL IN THE WORLD area > 3 million km2 The Brazilian mining industry currently finds itself in a time of vigorous growth, thanks both to the profound structural changes that the country has experienced and the social and economic situation in which the world is in. This growth is driven by the urbanization process in emerging countries endowed with large territorial areas, high demographic density and high GDP (Gross Domestic Product), as the BRICs (Brazil, Russia, India and China), which coincidentally makes them important players for global mining. Population > 14 million inhabitants Bangladesh Republic of Nigeria Pakistan Russia EUA Indonesia BRAZIL Australia China India Canada Spain Germany United Kingdom Japan Italy South Korea France Mexico GDP > US$ 9 billion Source: World Bank (21)
3 3 5. MINERAL TRADE BALANCE Brazilian Trade Balance 211 = US$ US$ million Exports Imports Balance Source: MDIC/Aliceweb Brazil s Mineral Production (BMP) 211: Forecast of Brazil s mineral production totaled US$ 5 billion From 2, the increased demand for minerals, especially the high global growth rate, boosted the value of the BMP. During 21/211, the value of the BMP will have an increase of 55%, from US$7,7 billion to US$5 billion (estimated). With the urbanization process and the strengthening of world economies, it is estimated that the BMP will keep growing between 5% and 8% per year over the next two years GROWTH OF BRAZIL S MINERAL PRODUCTION In US$ billions Years Forecast Petroleum & Gas not included. Source: DNPM/IBRAM
4 4 MINERAL PRODUCTION: GLOBAL POSITION OF BRAZIL Exporter (Global Player) Niobium (1st) Iron ore (1st) Manganese (2nd) Tantalum (2nd) Graphite (3rd) Bauxite (2nd) Dimension Stone Exporter Nickel Magnesium Kaolin Tin Vermiculite Chromium Gold Self-sufficient Limestone Industrial diamonds Titanium Tungsten Talc Importer / Producer Copper Phosphate Diatomite Zinc External Dependency Metallurgical Coal Potassium Sulphur Rare Earths STRATEGIC Source: DNPM/IBRAM/PNM 23 CLASSIFICATION OF THE PRODUCTION AND MINERAL RESERVES OF BRAZIL IN THE WORLD Mineral Production Brazil Ranking Position Reserves Brazil Ranking Position Bauxite 14% 3 rd 6,8% 5 th Copper 2% 5 th 2% 13 th Dimension Stone 7,7% 3 rd 5,6% 6 th Gold 2,3% 12 th 3,3% 9 th Iron Ore 17% 2 nd 11% 5 th Kaolim 6,8% 5 th 28% 2 nd Manganese 2% 2 nd 1,1% 6 th Niobium 98% 1 st 98% 1 st Tantalite 28% 2 nd 5% 1 st Tin 4,1% 5 th 13% 3 rd Zinc 2,4% 12 th,85% 6 rd Source: PNM 23/IBRAM Brazil is an important player in the world s mining industry. However, it still depends on some minerals that are key to the economy. Brazil is the fourth largest consumer of fertilizers, and is responsible for only 2% of the world s production. The Country imports 91% of the potassium and 51% of the phosphate needed, both essential for the fertilizers industry.
5 5 MAIN MINERAL PRODUCTS IMPORTED AND ExPORTED (US$ 1..) Δ 11/1 Brazilian Exports ,81% Exports Mineral Sector ,58% Iron Ore ,64% Gold (in bars) ,38% Niobium (iron-niobium) ,18% Copper ,4% Silicon ,39% Kaolin ,2% Manganese Ore ,4% Bauxite ,15% Tin ,5% Lead ,67% Granite ,6% Others Minerals ,88% Brazilian Imports ,47% Imports Mineral Goods ,57% Coal ,31% Potassium ,48% Phosphate ,96% Copper ,88% Zinc ,7% Sulphur ,43% Others Minerals ,43% Brazilian Balance ,89% Balance of the Mineral Sector ,18% Brazilian Trade Balance Mineral Sector Trade Balance Source: MDIC/Aliceweb
6 Mineral Trade Balance 6 EXportS 211 % of value exported in US$ imports 211 % of value imported in US$ Gold 4,5% Niobium 3,7% Copper 3,16% Silicon 1,28% Kaolin,53% Manganese,61% Bauxite,64% Tin,5% Lead,2% Phosphate 1,83% Copper 1,11% Zinc 1,63% Silphur 3,91% Others 5,46% Coal 46,32% Granite,5% Iron Ore 84,12% Others,88% Potassium 3,74% Source: MDIC/Aliceweb Source: MDIC/Aliceweb royalties in BrAZiL (CFEm FiNANCiAL CompENSAtioN For mineral resources EXpLoitAtioN) , ,9 1.78, , ,1 462,5 537, Source: DNPM/IBRAM
7 7 Jobs in the Brazilian Mineral Sector IMPORTANCE OF MINING FOR THE GENERATION OF JOBS Mining First Transformation 11 Total 14 The total labor force employed in mining in 211 reached 175 thousand workers. Studies by the Ministry of Mines and Energy s National Department of Geology, Mining and Mineral Processing show that the multiplier effect of jobs is 1:13 in the mining sector, ie, for each mining job, 13 others are created (direct employment) along the production chain. 4 2 Suppliers 1 EMPLOyMENT GENERATION MULTIPLIER EFFECT: 1:13 Generates 2,2 million direct jobs in Brazil (175. created by the mining industry) Date 211 Therefore, it can be assumed that the mineral sector in 211 employs about 2.2 million workers (directly), not considering the vacancies generated during the research, prospecting and planning stages, and the workforce employed in the mines. Source: National Secretary for Geology, Mining and Mineral Trasnformation of the Ministry of Mines and Energy of Brazil (MME) HDI of mineral producing municipalities The Human Development Index is greater in mineral producing municipalities than the average in the respective States. Even when far from large urban centers or in areas of poverty, a mining company has become a real possibility for the sustainable development of the region. The HDI is calculated by the United Nations Development Program UNDP. Municipality -Estate Mineral State HDI Municipality HDI Itabira MG Iron Ore,766,798 Araxá MG Niobium,766,799 Nova Lima MG Gold,766,821 Catalão GO Phosphate,773,818 Cachoeiro de Itapemirim ES Dimension Stone,767,77 Paraupebas PA Iron Ore,72,74 Oriximiná PA Bauxite,72,769 Presidente Figueiredo AM Cassiterite,713,742 Source: UNDP
8 Investiments in the Minning Sector 8 The graphs shows an increase in the amount of investments in the Brazilian mining sector. The figures calculated by IBRAM are projections for a 5-year period. The Association expects, based on data collected from mining companies, significant investments of US$ 68.5 billion for the period , which represents a new record for the mining industry. The private sector invests more in the Country, an average of over US$ 13 billion per year. This amount is periodically reassessed by IBRAM. These investments apply to a number of minerals, and since Iron Ore is the most significant one, it will take up 63% of the total. Shutterstock increases in mineral production UNtiL 215 Ores Production 211 (1. ton) (A) Increase on 215 (1. ton) (B) Forescast Production on 215 (C)=(A+B) Variation x times (V/T) Iron Ore ,1 Nickel ,6 Alumina ,1 Bauxite ,4 Copper ,1 Gold,58,33,91 1,5 Phosphate ,8 Zinc ,2 Agregates ,3 Niobium ,5 Source: IBRAM estimatives
9 9 investment in the mineral SECtor In billions of US$ ,8 68, jan-7 mar-7 may-7 jul-7 sep-7 nov-7 jan-8 mar-8 may-8 jul-8 sep-8 mar-9 jan-1 apr-1 aug-1 jan-11 sep-11 Source: IBRAM investments of the mineral SECtor BY mineral From In millions of US$ Iron Alumina Nickel Phosphate Copper Gold Potassium Manganese Niobium Zinc limestone Vanadium Coal Chromite New investments in the mineral sector 211 to 215: US$ 68,5 billion Investments in the mineral sector 21 to 214: US$ 62 billion Source: IBRAM
10 Geological Surveying 1 Brazil s mining potential is significant. To date, about less than 3% of its immense territory is known through geological surveys in an appropriate scale for this activity. The Indigenous areas, that account for 13% of this territory and 25% of the Amazon, are among regions that may have their mining potential assessed, as well as the coastal area, located along the Brazilian continental platform. The graph shows that there is pent-up demand in the field of geology surveying in Brazil. For illustrative purposes, although its land area is about seven times that of Peru, Brazil allocates only half of the amount invested by that country on geological research. PRIVATE INVESTMENT IN MINERAL ExPLORATION TOP 1 COUNTrIES IN TErMS OF INvESTMENTS IN MINEraL ExPLOraTION Other Countries 31% Canada (US$ 2,3 billion) 19% Brazil (US$ 321 million) 3% Australia (US$ 1,2 billion) 12% Argentina 3% US 8% China 4% Russia 4% Chile 5% Peru 5% Mexico 6% 1 leading countries Total: US$ 1,7 billion Source: Metals Economic Group 29
11 11 Shutterstock INVESTMENTS IN MINERAL ExPLORATION IN THE WORLD Global Investment (US$ 1.7.) Area (sq.km) x 1. Absolute Investments (US$) Share of Investments (%) Absolute Investmentes/ Area (US$/sq.km) Brazil Investment vs Countries Canada ,2 5.4 Australia ,2 4.5 USA ,3 2.4 Mexico , 8.7 Chile , 18.8 Peru , Russia ,7.7 China ,1 1.2 Argentina ,1 3,1 Brazil ,1 1 US$ 1. The table shows the disparity between the total amounts invested by countries assessed as compared to Brazil. The analysis takes into account the countries sizes, and confirms that smaller countries (Peru, Chile and Mexico) or countries of similar territorial areas are ahead of Brazil in exploration investment (except for Russia).
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