Brazil Mining 2011 - GBR

BRAZIL MINING
Mining operations have a clear capacity to mitigate deforestation. (Photo courtesy of Mineração Buritirama)
Dequech. “The Buritirama ore body was
discovered in 1966. The implementation
of the project began in 1992 and finished
in January 1994. Total reserves are estimated
at 18.4 million mt of high-grade
manganese ore. We have a productive
capacity of 1 million mt/y of first-class
manganese. Buritirama manganese ore
may be ranked as metallurgic, with 45%
Mn grade, low phosphorous grade and high
Mn/Fe ratio. Mineracao Buritirama’s manganese
is exported mainly to China, but
also to Europe and Latin America. About
20% of the production is directed at the
Brazilian internal market. Today we have a
solid position in the manganese market,
supplying five different products.”
As steel production in Europe has
declined, Brazil’s manganese producers
have turned their attentions toward emerging
Asia. Brazil’s vast manganese resource
and established status as a key global supplier
provides plenty of opportunities for
new entrants to come into the market. The
key challenges for potential investors to
overcome are Brazil’s traditional challenges,
surrounding logistics and energy
infrastructure. Vale’s vast logistical network
is a key support mechanism for the company’s
dominance over Brazilian manganese
production.
Gold
As uncertainty in the global economy
lingers on and gold prices continue to
increase beyond records set months and
weeks previously, the world’s relatively
untapped gold mining regions, such as
Brazil, have become of increasing interest
to a host of domestic and international
interests. NYMEX gold prices have
increased by almost 500% since 2000,
from $250/oz to more than $1,400/oz.
Brazilian gold exports have grown alongside
price increases to $2 billion in 2010.
Gold is now Brazil’s second most important
mining export after iron ore. “When you
look at the fundamentals, internationally
things do look positive for gold producers.
There is ongoing currency instability, particularly
in the U.S. dollar and emerging
markets, which is having an increasing
impact upon the global market. These
trends have seen the global investment
community look to gold as a safer asset,”
said Helcio Guerra, vice president of
AngloGold Ashanti.
With gold reserves of 2,000 mt, 4.5%
of global ore reserves, Brazil ranks as the
sixth most endowed country. Brazil is currently
the 13 th largest global gold producer
with 61 mt of total gold output and
accounts for just 2.5% of global production.
This output gap represents a significant
investment opportunity for new
entrants to help bring production into proportion
with Brazil’s reserves.
Brazil’s main gold producing states are
Minas Gerais, Goias, Bahia and Para
accounting for 64%, 11%, 11% and 3%
of overall production respectively. Current
production levels are shared between three
major firms: AngloGold Ashanti, Yamana
Gold and Kinross, each accounting for
approximately 25% of output, with smaller
firms such as Jaguar Mining and Eldorado
Gold making up the remaining share of
production. As highlighted previously,
Brazilian garimperos have significant
involvement in national gold production,
with 9% of total output.
AngloGold Ashanti is Brazil’s leading
gold producer with a 2010 output of
500,000 oz between the company’s Serra
Grande and Brazil Mineracao operations.
“Brazil is of significant importance for
AngloGold Ashanti’s operations moving forward,”
said Guerra. “The geological poten-
Roger Agnelli, CEO of Vale. (Photo courtesy
of Vale)
Helcio Guerra, vice president of AngloGold
Ashanti. (Photo courtesy of AngloGold Ashanti)
Ludovico Costa, president and CEO of Yamana
Gold. (Photo courtesy of Yamana Gold)
Jones Belther, mineral exploration director of
Votorantim. (Photo courtesy of Antonio Larghi)
70 E&MJ • JANUARY/FEBRUARY 2011 www.e-mj.com