Brazil
An Optimistic Outlook for Mining in Brazil
MINING COMPANIES IN BRAZIL
According to consolidated annual mining reports provided by the mining companies for 2011,
the National Mineral Production Department (DNPM) reported 8,870 mining companies operating
in 2011. This includes both the Mining Concession Regime and the Licensing Regime. They are
divided by region, as shown in the table below:
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
MINING COMPANIES IN BRAZIL
4
Mining Companies in Brazil
Mid-West: 1,075 companies
Northeast: 1,606 companies
North: 515 companies
Southeast: 3,609 companies
South: 2,065 companies
Source: DNPM – 2012
Brazil in the World
Brazil
Over the past decade, Brazil’s Mining Industry posted vigorous growth thanks to factors such as the
profound socioeconomic and infrastructure changes that the country has been experiencing. This
has been the case despite the fact that expectations on the mining business have been reduced
as a result of the international crisis. This growth is driven by urbanization in emerging countries
endowed with significant territorial areas, high population density and large GDP (Gross Domestic
Product), such as the BRICs (Brazil, Russia, India, and China), which coincidentally are major
players in the global mining arena.
BRAZIL IN THE WORLD
Area > 3 million km²
Population > 140 million inhabitants
Bangladesh
Nigeria
Indonesia
BRAZIL
Australia
China
Índia
Canada
Italy
Source: Banco Mundial – 2010
Germany
South Korea
United Kingdom
Japan
France
Mexico
GDP > US$ 900 billion
Samarco
Spain
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
Pakistan
Russia
United States
5
Brazil
MAJOR REGIONS WITH MINERAL DEPOSITS
Presidente Figueiredo (AM)
Tin
Paragominas (PA)
Aluminum
Carajás (PA)
Iron, Gold, Copper, Nickel and Manganese
Alagoas (AL)
Copper
Rondônia (RO)
Tin
Sergipe (SE)
Potassium Salts
Bahia (BA)
Bauxite, Iron, Vanadium, Aggregates,
Nickel and Chromium
Pedra Azul/Salto da Divisa (MG)
Graphite
Governador Valadares (MG)
Gems
6
Copper
Gold
Aluminum
Tin
Iron-Manganese
Graphite
Kaolin
Nickel
Coal
Aggregates
Espírito Santo (ES)
Ornamental Rocks
Urucum (MS)
Manganese and Iron
Rio de Janeiro (RJ)
Aggregates
Goiás (GO)
Copper, Nckel and Gold
Iron Quadrangle
Iron, Gold, Manganese and Bauxite
Araxá (MG)
Niobium
São Paulo (SP)
Aggregates
Rio Grande do Sul (RS)
Amethyst and Aggregates
Castro (PR)
Talc
Criciúma (SC)
Coal
Source: IBRAM – 2012
TRADE BALANCE FOR THE MINING INDUSTRY
BRAZIL'S TRADE BALANCE IN 2012 = US$ 29,550
27,603
35,000
9,139
7,757
11,292
12,599
18,096
5,497
10,011
6,540
5,185
5,000
11,030
10,000
4,490
15,000
15,196
20,000
9,729
13,112
22,841
30,000
25,000
29,550
35,360
40,000
38,689
45,000
38,418
49,710
50,000
US$ million (FOB)
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
Itaituba (PA)
Gold
0
2006
2007
Source: MDIC/Aliceweb – 2012
2008
2009
2010
2011
Exports
2012
Imports
Balance
BRAZIL’S MINERAL PRODUCTION (BMP)
Since 2000, increased demand for minerals, especially due to the high rate of growth globally,
has boosted Brazil’s Mineral Production (BMP), in one decade, showed a significant growth. As
urbanization rushes ahead and emerging economies go from strength to strength, it is estimated
that BMP will continue to grow between 2% and 5% per year, over the next two years.
Brazil
2012: Brazil’s Mineral Production totaled US$51 billion
TRENDS IN BRAZIL’S MINING PRODUCTION
US$ BILLION
55
53
50
51
39
40
35
30
25
15
10
5
0
Year 78
80
82
84
86
88
90
92
Growth in one decade = 550%
Source: DNPM/IBRAM – 2012
94
96
98
00
02
04
2008-2012 = 82%
2009-2012 = 112.5%
2010-2012 = 30%
2012 /2011 = -3.7% (estimate)
06
08 09 10 11 12
Estimate
Does not include oil and gas.
Average value for the year.
MINERAL PRODUCTION: BRAZIL’S GLOBAL POSITION (2012)
Exporter
(Global Player)
Exporter
Self-sufficiency
Niobium (1st)
Iron Ore (2nd)
Manganese (2nd)
Tantalite (2nd)
Graphite (3rd)
Bauxite (2nd)
Ornamental Rocks (4th)
Nickel
Magnesite
Kaolin
Tin
Vermiculite
Chromium
Gold
Limestone
Industrial Diamond
Talc
Titanium
Tungsten
STRATEGIC MINERALS
Source: DNPM/PNM 2030/IBRAM – 2012
Importer/
Produce
External
Depende
Copper
Diatomite
Phosphate
Zinc
Metallurgical Coal
Sulphur
Potassium
Rare Earths
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
20
7
Brazil
RANKING OF BRAZIL’S MINERAL PRODUCTION AND RESERVES AT GLOBAL LEVEL
Minerals
Global
Production
Position in Ranking
Bauxite
14%
3rd
Copper
2%
5
Brazilian
Reserves
Position in
Ranking
6.8%
5th
th
2%
13th
Ornamental Rocks
7.7%
3rd
5.6%
6th
Gold
2.3%
12th
3.3%
9th
Iron Ore
17%
2nd
11%
5th
Kaolin
6.8%
5
th
28%
2nd
Manganese
20%
2nd
1.1%
6th
Niobium
98%
1st
98%
1st
Tantalite
28%
2nd
50%
1st
Tin
4.1%
5
th
13%
3rd
Zinc
2.4%
12th
0.85%
6th
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
Source: PNM 2030/IBRAM – 2012
Brazil is a major player in the global Mining Industry. However, the Country is still dependent on
some strategic minerals required by its economy. Brazil is the fourth largest consumer of fertilizers
in the world and accounts for only 2% of the global production. The Country imports 91% of its
potassium and 51% of its phosphate requirements, both essential for the fertilizer industry.
MAJOR EXPORTS AND IMPORTS (US$ 1,000,000)
Brazil’s exports
2011
2012
201,915
256,039
242,580
Mineral exports - Commodities
35,362
49,710
38,689
Iron Ore
28,912
41,817
30,989
1,786
2,239
2,341
Gold (in bars)
Niobium (Ferroniobium)
1,557
1,840
1,811
Copper
1,238
1,573
1,511
Silicon
460
637
523
Kaolin
275
261
236
Manganese Ore
357
306
201
Bauxite
270
319
325
8
23
16
Tin
Lead
Granite
Other
Brazil’s Imports
12
9
7
219
247
233
268
439
495
181,768
226,243
223,154
Mineral imports - Commodities
7,757
11,292
9,139
Mineral coal
3,575
5,231
3,600
Potassium Chloride
2,204
3,471
3,510
Phosphate
135
207
205
Copper
952
1,141
562
Zinc
157
184
169
Sulphur
246
441
414
Other
488
617
678
Balance – Brazil
20,147
29,796
19,425
Balance – Mining Industry
27,605
38,418
29,550
Source: Aliceweb – 2012 (updated in November 2012).
8
2010
BRAZIL'S MINING TRADE BALANCE – EXPORTS AND IMPORTS
% of amount in US$
Manganese Ore
0.52%
Kaolim 0.61%
Bauxite
0.84%
Tin 0.04%
Lead 0.02%
Granite 0.60%
Other 1.28%
Silicon 1.35%
Copper 3.90%
Phosphate
2.25%
Brazil
Brazil’s Mining Trade Balance –
Exports and Imports
Sulphur
Zinc
Copper 1.85% 4.53% Other
7.42%
6.15%
Niobium
(Ferroniobium)
4.68%
Iron Ore
80.10%
Exports
Imports
Potassium Chloride
38.41%
Mineral Coal
39.39%
Source: MDIC/Aliceweb – 2012
The largest ore producing states in 2012, according to CFEM (Financial Compensation for Mineral
Resources Exploitation) revenues are:
MG (53.2%), PA (28.6%), GO (4.1%), SP (2.8%), BA (2.0%), and Others (9.3%).
In 2012, the royalties (CFEM) reached a new record of R$ 1.832 billion. In 2011 the amount had
been significant with R$ 1.540 billion, or 42.8% higher than in 2010, which was R$ 1.078 billion.
CFEM – also known as the Mining Royalty – is one of many charges in the mining supply chain.
This charge was established in Article 20, paragraph 1 of the 1988 Constitution, and it is payable to
states, the Federal District, municipalities, and Federal Government agencies as consideration for
the economic exploitation of mineral resources in their respective territories. CFEM’s revenues are
distributed as follows:
• 12% to the Federal Government (DNPM 9.8%, IBAMA 0.2%, MCT/FNDCT 2%);
• 23% to the state where the mineral has been sourced;
• 65% to the producing municipality.
Tax rates are applied onto the net revenue, and they vary according to the mineral involved:
•
•
•
•
3% for: aluminum ore, manganese, salt-gem, and potassium;
2% for: iron, fertilizer, coal and other substances;
1% for: gold;
0.2% for: precious stones, cuttable colored stones, carbonates, and noble metals.
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
Gold
(in bars)
6.05%
9
ROYALTIES IN BRAZIL – 2005-2012
Brazil
(CFEM – FINANCIAL COMPENSATION FOR MINERAL RESOURCES EXPLOITATION)
1,832.8
1,800
1,560.7
1,600
1,400
R$ million
1,200
1,083.1
1,000
857.8
800
742.7
600
400
406
465.8
547.2
200
0
2005
2006
2007
2008
2009
2010
2011
2012
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
Source: DNPM/IBRAM – 2012
10
Employment in Brazil’s Mining Industry
A total of 175 thousand workers were employed in the mining sector in 2011. Studies conducted by
the Ministry of Mines and Energy’s Secretariat for Geology, Mining and Mineral Processing show
that the multiplier effect of job creation is 1:13 in the mining sector, i.e., for every job created in the
mining sector another 13 jobs (direct jobs) are generated along the supply chain. Therefore, in 2011
the mining sector employed about 2.2 million workers directly, not including the job posts generated
in research, exploration and planning, and the manpower employed in the mines.
Note: Informal work arrangements in the mining
industry cannot be ignored, especially when it comes
to minerals of high unit value (gems, gold, diamond,
etc.), and also in the extraction of mineral aggregates
for the civil construction sector. Many workers across
Brazil’s 5,565 municipalities fail to be covered by official
statistics. Estimates, though very inaccurate, indicate
somewhere between 300 thousand and 500 thousand
workers (PNM 2030).
THE IMPORTANCE OF MINING
IN JOB CREATION
16
14
12
11
JOB CREATION
MULTIPLIER EFFECT 1:13
8
2.2 million
direct jobs are created in Brazil
(175,000 jobs created in the
mining industry). Date: 2011
4
2
1
0
Source: Ministry of Mines and Energy (MME)’s Secretariat for Geology,
Mining and Mineral Processing – PNM 2030
Suppliers
Mining
Industry
Source: SNGMTM/MME
Initial
Processing
Total
HDI of Mining Municipalities
Municipalities – States
Ore
HDI for the State
HDI for the Municipality
Itabira – MG
Iron Ore
0.766
0.798
Araxá – MG
Niobium
0.766
0.799
Nova Lima – MG
Gold
0.766
0.821
Catalão – GO
Phosphate
0.773
0.818
Cachoeiro de Itapemirim – ES
Ornamental Rocks
0.767
0.770
Parauapebas – PA
Iron Ore
0.720
0.740
Oriximiná – PA
Bauxite
0.720
0.769
Presidente Figueiredo – AM
Cassiterite
0.713
0.742
Brazil
The Human Development Index (HDI) of mining towns is higher than that of their respective states.
Even when mining projects are set up away from major urban areas or even in areas with low
social indicators, they bring a tangible potential for regional sustainable development. The HDI is
published by the United Nations Development Program – UNDP.
Investments in the Mining Sector
The graphs on pages 12 and 13 show the growth in the volume of investments in Brazil’s mining sector.
The values provided by IBRAM are projections for five-year periods. Based on data obtained from
the mining companies, IBRAM reported massive investments of US$75 billion for 2012-2016, which
sets a new record for the Mining Industry.
It is one of the private segments with the most significant investments in the Country. After all,
investments amount to US$15 billion per year. This figure is recalculated and updated periodically
by IBRAM in its website.
Shutterstock
These investments cover a large number of minerals, of which iron ore is the most important,
accounting for 63% of total investments.
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
Source: UNDP – 2012
11
Brazil
MINERAL PRODUCTION GROWTH BY 2016
Mineral
Production in 2011
(1,000 tons) (A)
Increments by 2016
(1,000 tons) (B)
Expected Production
by 2016 (C)=(A+B)
Change (C/A)
Aggregates
673,000
176,000
849,000
26%
Iron
369,000
451,000
820,000
122%
Bauxite
31,000
7,000
38,000
23%
Manganese
2,600
400
3,000
15%
Phosphate
1,800
700
2,500
39%
Copper
400
200
600
50%
Potassium
290
2,110
2,400
728%
Zinc
285
65
350
23%
Niobium
90
30
120
33%
Nickel
70
30
100
43%
Gold
0.066
0.029
0.095
44%
Source: Estimates by IBRAM – 2012
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
INVESTMENTS IN THE MINING SECTOR – 2012-2016
12
US$ BILLION
Record
2008-2012
2007-2011
80
2009-2013
2010-2014
2011-2015
2012-2016
75
72
62
64
57
54
56
48
48
64,8
68,5
47
49
Mar/09
Jan/10
40
32
32
25
28
24
16
8
0
Jan/07
Jul/07
Source: IBRAM – 2012
Sep/07
Jan/08
Jul/08
Apr/10
Aug/10
Jan/11
Sep/11
May/12
INVESTMENTS IN THE MINING SECTOR – 2012-2016
Brazil
US$ BILLION
46,032
Iron
44,969
7,872
Potassium
2,675
3,743
Rare Earths
3,417
Aluminum Supply Chain*
5,220
3,345
Nickel
6,550
3,296
Aggregates
2,043
2,542
Copper
1,725
Gold
1,005
1,890
Phosphate
993
Limestone
310
Zinc
631
Manganese
400
463
387
200
Chromite
310
193
Niobium
400
148
Lead
129
200
0
10,000
Source: IBRAM – 2012
20,000
30,000
40,000
50,000
New investments in the Mining Sector (2011-2015): US$68.5 billion
New investments in the Mining Sector (2012-2016): US$75 billion
* Aluminum Supply Chain includes investments in Bauxite, Alumina and Aluminum.
Shutterstock
Vanadium
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
2,418
13
Eugênio Paccelli
Brazil
Information and Analyses on the Brazilian Mineral Economy • 7th Edition
MAIN INVESTMENTS IN THE MINING SECTOR BY STATE
2012-2016 – US$ 75 BILLION
AM – US$ 2,666,401.65 (3.56%)
Potassium
Aluminum, Bauxite, Manganese, Copper, Iron, Nickel and Gold
MA – US$ 1,713,284.26 (2.28%)
Logistics and Gold
CE – US$ 2,464,294.12 (3.29%)
Phosphate and Uranium
RN – US$ 387,840.24 (0.52%)
Iron
AL – US$ 121,200.08 (0.16%)
Copper
SE – 5,763,736.91 (7.68%)
Potassium
BA – US$ 6,535,216.11 (8.71%)
Iron, Gold, Vanadium, Nickel and Chromium
TO – US$ 96,960.06 (0.13%)
Phosphate and Gold
MG – US$ 26,160,139.73 (34.88%)
Bauxite, Alumina, Iron, Phosphate, Gold and Logistics
MT – US$ 621,513.99 (0.83%)
ES – US$ 2,776,936.12 (3.70%)
Limestone, Zinc and Gold
Iron and Logistics
MS – 1,939,201.20 (2.59%)
RJ – US$ 1,939,201.20 (2.59%)
Iron and Logistics
GO – US$ 242,400.15 (0.32%)
Copper and Nickel
Source: IBRAM – 2012
14
PA – US$ 18,129,592.04 (24.17%)
Logistics
SC – US$ 145,440.09 (0.19%)
Coal