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Votorantim
The Strength of
Brazilian Mining
2012
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.
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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 2010. Their breakdown by region is as follows:
MIDWEST: 942 companies
NORTHEAST: 1.258 companies
NORTH: 439 companies
SOUTHEAST: 3.392 companies
SOUTH: 1.901 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 > 140 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$ 900 billion
Source: World Bank (2010)
3
MINERAL TRADE BALANCE
Brazilian Trade Balance 2011 = US$ 29.796
35.360
45.000
40.000
11.292
27.603
7.757
12.599
5.497
13.112
9.729
5.185
10.000
4.490
15.000
6.540
20.000
10.011
15.196
25.000
18.096
22.841
30.000
11.030
US$ million
35.000
38.419
49.710
50.000
5.000
0
2006
2008
2007
Exports
Imports
2009
2010
2011
Balance
Source: MDIC/Aliceweb
Brazil’s Mineral Production (BMP)
2011: Forecast of Brazil’s mineral production totaled US$ 50 billion
From 2000, the increased demand for minerals, especially the high global growth rate, boosted
the value of the BMP. During 2001/2011, the value of the BMP will have an increase of 550%, from
US$7,7 billion to US$50 billion (estimated). With the urbanization process and the strengthening
of world economies, it is estimated that the BMP will keep growing between 5% and 8% per year
over the next two years.
GROWTH OF BRAZIL’S MINERAL PRODUCTION
In US$ billions
50
40
35
30
25
20
15
10
5
0
Years 78
80
82
84
86
88
90
92
94
96
98
00
02
04
06
08 09 10 11
Forecast
Petroleum & Gas not included.
Source: DNPM/IBRAM
4
MINERAL PRODUCTION: GLOBAL POSITION OF BRAZIL
Exporter
(Global Player)
Exporter
Self-sufficient
Niobium (1st)
Iron ore (1st)
Manganese (2nd)
Tantalum (2nd)
Nickel
Magnesium
Kaolin
Tin
Limestone
Industrial diamonds
Titanium
Graphite (3rd)
Bauxite (2nd)
Dimension Stone
Vermiculite
Chromium
Gold
Tungsten
Talc
Importer
/ Producer
External
Dependency
Metallurgical Coal
Potassium
Copper
Phosphate
Diatomite
Zinc
Sulphur
Rare Earths
STRATEGIC
Source: DNPM/IBRAM/PNM 2030
CLASSIFICATION OF THE PRODUCTION AND MINERAL RESERVES OF BRAZIL IN THE WORLD
Mineral
Production Brazil
Ranking Position
Reserves Brazil
Ranking Position
Bauxite
14%
3rd
6,8%
5th
Copper
2%
5th
2%
13th
Dimension Stone
7,7%
3rd
5,6%
6th
Gold
2,3%
12th
3,3%
9th
Iron Ore
17%
2nd
11%
5th
Kaolim
6,8%
5th
28%
2nd
Manganese
20%
2nd
1,1%
6th
Niobium
98%
1st
98%
1st
Tantalite
28%
2nd
50%
1st
Tin
4,1%
5th
13%
3rd
Zinc
2,4%
12th
0,85%
6rd
Source: PNM 2030/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
MAIN MINERAL PRODUCTS IMPORTED AND ExPORTED
(US$ 1.000.000)
2011
2010
Δ 11/10
256.039
201.915
26,81%
49.710
35.360
40,58%
41.817
28.912
44,64%
Gold (in bars)
2.239
1.786
25,38%
Niobium (iron-niobium)
1.840
1.557
18,18%
Copper
1.573
1.238
27,04%
Silicon
637
460
38,39%
Kaolin
261
275
-5,02%
Manganese Ore
306
357
-14,40%
Bauxite
319
270
18,15%
23
8
192,50%
9
12
-21,67%
Granite
247
219
12,60%
Others Minerals
439
268
63,88%
226.243
181.768
24,47%
11.292
7.757
45,57%
Coal
5.231
3.575
46,31%
Potassium
3.471
2.204
57,48%
Phosphate
207
135
52,96%
1.141
952
19,88%
Zinc
184
157
17,07%
Sulphur
441
246
79,43%
Others Minerals
617
488
26,43%
Brazilian Balance
29.796
20.147
47,89%
Balance of the Mineral Sector
38.419
27.603
39,18%
Brazilian Exports
Exports Mineral Sector
Iron Ore
Tin
Lead
Brazilian Imports
Imports Mineral Goods
Copper
Brazilian Trade Balance
Mineral Sector Trade Balance
Source: MDIC/Aliceweb
Mineral Trade Balance
6
EXportS 2011
importS 2011
% of value exported in US$
% of value imported in US$
Gold 4,50%
Niobium 3,70%
Copper 3,16%
Silicon 1,28%
Kaolin 0,53%
Manganese 0,61%
Bauxite 0,64%
Tin 0,05%
Lead 0,02%
Granite 0,50%
Others 0,88%
Iron Ore
84,12%
Source: MDIC/Aliceweb
Silphur
3,91%
Others
5,46%
Zinc
1,63%
Copper
10,11%
Phosphate
1,83%
Coal
46,32%
Potassium
30,74%
Source: MDIC/Aliceweb
roYALtiES iN BrAZiL 2005-2011
(CFEm – FiNANCiAL CompENSAtioN For miNErAL rESoUrCES EXpLoitAtioN)
1.800
1.600
1.540,0
1.400
1.200
1.078,2
1.000
853,9
736,8
800
600
400
405,1
462,5
537,4
200
0
2005
2006
2007
2008
2009
2010
2011
Source: DNPM/IBRAM
Jobs in the Brazilian Mineral Sector
7
IMPORTANCE OF MINING FOR
THE GENERATION OF JOBS
16
First
Transformation
12
11
Mining
8
4
2
Total
14
1
0
Suppliers
EMPLOyMENT GENERATION
MULTIPLIER EFFECT: 1:13
The total labor force employed in mining in
2011 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.
Therefore, it can be assumed that the mineral
sector in 2011 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.
Generates 2,2 million direct jobs in Brazil
(175.000 created by the mining industry)
Date 2011
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
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
Dimension
Stone
0,767
0,770
Paraupebas – PA
Iron Ore
0,720
0,740
Oriximiná – PA
Bauxite
0,720
0,769
Presidente
Figueiredo – AM
Cassiterite
0,713
0,742
Source: UNDP
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 2011-2015, 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.
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iNCrEASES iN miNErAL prodUCtioN UNtiL 2015
Increase on 2015
(1.000 ton) (B)
Forescast
Production on 2015
(C)=(A+B)
372.000
399.500
771.500
2,1
74
118
192
2,6
Alumina
8.900
10.000
18.900
2,1
Bauxite
31.700
13.000
44.700
1,4
Copper
213
449
662
3,1
Gold
0,058
0,033
0,091
1,5
Phosphate
6.300
5.300
11.600
1,8
288
50
338
1,2
516.000
156.770
672.770
1,3
80
40
120
1,5
Ores
Iron Ore
Nickel
Zinc
Agregates
Niobium
Production 2011
(1.000 ton) (A)
Variation x times
(V/T)
Source: IBRAM estimatives
9
iNvEStmENt iN thE miNErAL SECtor 2011 – 2015
In billions of US$
2011-2015
2011-2015
2010-2014
80
2008-2012
70
2010-2014
2009-2013
57
60
54
48
50
30
32
28
25
49
47
2007-2011
40
68,5
64,8
62
2010-2014
20
10
sep-11
jan-11
aug-10
apr-10
jan-10
mar-09
sep-08
jul-08
may-08
mar-08
jan-08
nov-07
sep-07
jul-07
may-07
jan-07
mar-07
0
Source: IBRAM
In millions of US$
Investments in the mineral
sector 2010 to 2014:
US$ 62 billion
0
310
Chromite
44
40
Coal
270
200
Vanadium
310
0
limestone
631
0
Zinc
66
400
Niobium
300
Manganese
400
2.675
New investments in the
mineral sector 2011 to 2015:
US$ 68,5 billion
Potassium
Gold
Copper
Phosphate
Nickel
Alumina
Iron
0
2.030
2.418
2.657
2.542
2.510
1.890
6.716
6.550
8.187
5.220
39.230
44.969
iNvEStmENtS oF thE miNErAL SECtor BY miNErAL From 2011 – 2015
Source: IBRAM
Geological Surveying
10
Brazil’s mining potential is significant. To date, about less than 30% 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 10 COUNTrIES IN TErMS OF INvESTMENTS IN MINEraL ExPLOraTION
Canada
(US$ 2,03 billion)
19%
Other Countries
31%
Australia
(US$ 1,2 billion)
12%
Brazil
(US$ 321 million)
3%
US
8%
Argentina
3%
China
4%
Mexico
6%
Russia
4%
Chile
5%
Peru
5%
10 leading countries
Total: US$ 10,7 billion
Source: Metals Economic Group – 2009
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11
INVESTMENTS IN MINERAL ExPLORATION IN THE WORLD
Area (sq.km) x
1.000
Absolute
Investments
(US$)
Share of
Investments (%)
Absolute
Investmentes/
Area (US$/sq.km)
Brazil Investment
vs Countries
Canada
9971
2.033.000
19
0,2
5.4
Australia
7682
1.284.000
12
0,2
4.5
USA
9373
856.000
8
0,3
2.4
Mexico
1973
642.000
6
0,0
8.7
Chile
757
535.000
5
0,0
18.8
Peru
1285
535.000
5
0,4
11.1
17075
428.000
4
0,7
0.7
China
9600
428.000
4
0,1
1.2
Argentina
2780
321.000
3
0,1
3,1
Brazil
8547
321.000
3
0,01
1
Global Investment
(US$ 10.700.000)
Russia
US$ 1.000
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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