Positive Outlook for the Brazilian Mining

Brazil has one of the major mineral

patrimonies and is an important producer
and exporter of high quality ores. Thats
why Mining is one of the strengths of the
Brazilian economy.

Brazil in the world

Area > 3 million km2

Population > 150 million inhabitants

Bangladesh

The Mining Industry is a sector that is

responsible for the positive balance of the
Brazilian trade, and the outlook of this
economic activity is extremely optimistic
for the coming decades.

Australia
Republic of
Nigeria
Russia

EUA

Pakistan
BRAZIL

China

India
Indonesia

Shutterstock

Canada

Germany

Spain

Italy

United Kingdom

South Korea

Japan

Holland

France

Mexico

GDP > US$ 800 billion

Mining Companies in Brazil

DNPM The National Department of
Mineral Production According to Annual
Reports on Mining, DNPM registered
7,932 Companies in 2010, as follows:
Region
Center-West
Northeast
North

Companies
942
1.258
439

Southeast

3.392

South

1.901

Well known worldwide for its strong presence among major

producing nations of iron ore, Brazil also excels in the production
of several other minerals, among which, the aggregates for the
construction and the cement industries, where we can observe
a rapid increase in production. The inclusion of sustainability
is growing in the Brazilian mining industry, a reason for the
continued attention from entrepreneurs. The promotion of
sustainability in the mineral activity is one of the main objectives
of IBRAM Brazilian Mining Association (www.ibram.org.br), that
represents this Industry.

The updated data on the Brazilian Mining can be found at the website

www.ibram.org.br

Votorantim Alumnio

The mining industrys share in the Commercial

Trade Balance
Millions of US$

Forecast

50.000
43.000

45.000
40.000
35.360

35.000
30.000

27.604

25.000

22.841
18.096

20.000
15.000
10.000
5.000

33.000

15.196
11.030

10.011

6.540
4.490

13.112
9.729

5.185

12.599
5.497

7.756

10.000

0
2006

2007

2008

2009

2010

Brazilian balance in
2006 US$ 46 billion
Mineral Sector
14%

Brazilian balance in
2007 US$ 40 billion
Mineral Sector
25%

Brazilian balance in
2008 US$ 24 billion
Mineral Sector
53%

Brazilian balance in
2009 US$ 25 billion
Mineral Sector
50%

Brazilian balance in
2010 US$ 20 billion
Mineral Sector
136%

Exports

Imports

Surplus

2011e

Expected 2010 Brazilian

Balance = US$ 23 Billion
Balance of the mineral
sector = 143% greater
Source: MDIC/IBRAM

Brazilian Mineral Production

2011: Forecast of Brazilian mineral production totaled $50 billion

From year 2000 on, the increased demand for minerals, especially the high global growth rate, boosted
the value of the PMB. During 2001/2011, the value of the PMB will register an increase of 550%, going
from US$7,7 billion to US$50 billion. With the urbanization process and the strengthening of world
economies, it is estimated that the PMB will keep growing between 10% and 15% per annum (pa) over
the next three years.

GROWTH OF BRAZILIAN 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

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)
Ornamental Stone

Vermiculite
Chromium
Gold

Copper
Tungsten
Talc

Importer
/ Producer

External
Dependency
Metallurgical Coal
Potassium

Phosphate
Diatomite
Zinc

Sulphur
Rare Earths

STRATEGIC
Source: DNPM; IBRAM/MME

Geological Survey

The Brazilian mining potential is significant.

To date, only 30% of its immense territory
is known through geological surveys in
an appropriate scale for the 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 graphic shows that there is a
repressed demand in the field of
the geology survey in Brazil. Just to
illustrate, although its land area is
about seven times of that of Peru,
Brazil allocates only half of the amount
invested by that country on geological
research.

Private Investment in Mineral Exploration

The 10 countries that receive more investments in mineral exploration

Canada
(US$ 2,03 billion)
19%

Other Countries
31%
Brazil
(US$ 321 million)
3%

Australia
(US$ 1,2 billion)
12%
US
8%

Argentina
3%
China
4%

Russia
4%

Mexico
6%
Peru
5%

Chile
5%

10 leading countries
Total: US$ 10,7 billion
Source: Metals Economic Group 2009

Jobs
The total labor force employed in mining in 2011
reached 165 thousand workers. Studies from the
National Department of Geology, Mining and Mineral
Processing, of the Ministry of Mines and Energy, 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.

Importance of Mining for

the Generation of Jobs
First
Transformation

16
12

Total
14

11
Mining

8
4

Therefore, it can be assumed that the mineral sector

in 2011, employs about 2.1 million workers (directly),
not considering the vacancies generated in phasis
of research, prospecting, planning, and workforce
employed in the mines.

Suppliers

Employment generation

Multiplier Effect: 1:13

Generates 2,1 million direct jobs in Brazil
(160,000 created by the mining industry)
Date 2009

Investments in the Mining Sector

The graphics on page 7 shows the evolution of the volume of

investments in the mining sector in Brazil. The values calculated by
IBRAM are projected for a 5-year period. The Association expects,
based on data collected from the mining companies, a significant
application of $68.5 billion for the period 2011-2015, which
represents a new record for the Mining sector.
Thus, it is the private sector the one that invests most in the
country - an average of more than $13 billion a year. This value
is periodically reassessed by IBRAM.

In 2010, the collection of CFEM

(royalty) hit a new record: R$1
billion, or 46% higher than
in 2009, which was R$742
million. In 2011 the forecast
is that the collection should
reach R$1,3 billion.

Niquelndia (Votorantim)

The total forecast for the period 2011-2015 represents an

increase of 10.5% in comparison with the previous period (20102014). Investments refer to the most varied minerals, and the
Iron Ore, the leader among them, targets 65% of the total.

Royalties