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2010

A Positive Outlook for Brazilian Mining


Brazil possesses one of the largest concentrations of minerals and is an important producer and exporter of high-quality ores, reasons why mining has become one of the major drivers of the Brazilian economy. The market is looking more favorable in 2010 due to the effects of measures taken by the government to extend credit lines, raise tax cuts, increase investments in infrastructure, and reduce interest rates, among other actions. Prospects for the mining sector looks extremely optimistic for the coming decades.
Brazils economic sTrengTh area > 5 million Km pop > 150 million

Bangladesh Republic of Niger Russia Pakistan USA Indonesia

Brazil

Japan

Canada Australia

China Mexico

India

The mining secTor in Brazil is comprised predominanTly of small-scale mining companies


Small-scale companies 73,0% Medium-scale companies 22,2%

Germany Spain

United Kingdom Netherlands

Italy South Korea

France

gdp > 600 billion Us$

Large-scale companies 4,8%

So much so that in 2012, the country will have reached the same levels of production and sales registered before the height of the international financial crisis. Known worldwide for its presence as one of the principal iron ore producing nations, Brazil also stands out for its production in a number of other ores, among which are aggregate ores for civil construction and for the cement industry, which have seen impressive increases in production over recent months. The introduction of sustainability practicess and approaches has been on the rise in the Brazilian mining industry, and has become a major concern for Brazilian companies. Promoting sustainability in mining activities has been the chief objective of the efforts put forth by IBRAM, the organization that represents the sector.

mineral Trade Balance


50 % of The overall Brazilian Trade Balance
US$ million
25.000 20.000 15.000 10.000 5.000 0

22.841 Exports Imports Balance 13.112 10.011 6.540 5.185 9.729 5.497 12.599 18.096

15.196 11.030 4.490 2006

2007

2008

2009

Brazilian mineral production


Estimates indicates that in 2009, Brazilian Mineral Production should reach US$ 23 billion, a decrease of 18% over 2008, which was US$ 28 billion, excluding Oil and Gas. If we consider both the Mining and Mineral Transformation Industries, the value of Brazilian Mineral Production in 2009 reached US$ 52 billion. IBRAM forecast an increase of 20% in 2010 (in value) in the growth of Brazilian mineral production, due to the steady recovery noted in mining activities over recent months.

evolUTion of The Brazilian mineral prodUcTion valUe in Us$ Billion


2009 = US$ 23 Billion 30 25 20 15 10 5 0
78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 09

Variation 2000/2008 = 250% 2008/2009 = -18%

Years

Not included oil and gas

main prodUcTs imporTed and eXporTed (Us$ 1.000.000) Brazilian sTaTUs on The mineral gloBal marKeT exporter global player
Niobium (1 ) Iron Ore (1st) Bauxite (2nd) Manganese (2nd)
st

main products imported and exported


mineral primary goods exports Iron Ore Niobium Gold Manganese Copper Silicon Bauxite Lead Tin Zinc Others mineral primary goods imports Potassium Copper Coal Zinc Others mineral Trade Balance

2008
22.841 16.537 1.647 1.032 616 1.196 509 293 19 103 85 804 9.729 3.828 1.029 3.691 162 1.019 13.112

2009
18.096 13.247 1.060 1.384 186 803 347 158 9 13 889 5.497 2.060 624 2.181 71 561 12.599

Graphite (3 ) Crysothile (4th) Tantalum (2nd) Dimension Stone (4th)


rd

exporter

Nickel Magnesium Kaolin Tin Limestone (cement) Industrial Diamond Titanium Gold Phosphate Zirconite Diatomite Metallurgic Coal Sulfur

Vermiculite Chrome Mica

self suciency

Tungsten Talc Zinc

importer/ producer

Potash Copper

importer

Rare Earth Elements

Investments

Corporate mining has announced investments on the order of R$ 47 billion by 2013 in Brazil, the highest volume seen from private initiatives in the country. This total represents a decrease of 20% over figures projected before the worst phase of the international financial crisis (R$ 57 billion). IBRAM estimates that investments between 2010 and 2014 will total R$ 50 billion, a clear demonstration of the consistent recovery of business in the mineral sector.

Royalties
In 2009, collection of mining royalties by CFEM in Brazil totaled US$ 412 million, equivalent to R$ 742 million.

increases in mineral prodUcTion UnTil 2013 production increase forecast variation 2009* until 2013 production X (1.000 ton) (1.000 ton) on 2013 Times (a) (B) (c) = (a+B) (c/a)
300.000 75 7.100 27.000 1.604 205 0,065 6.800 150 60 230.000 115 7.500 13.000 160 136 0,030 4.300 50 20 530.000 190 14.600 40.000 1.764 341 0,095 11.100 200 80 1,8 2,5 2,1 1,5 1,1 1,7 1,5 1,6 1,3 1,3

ores

invesTmenT in mining secTor from 2009 To 2013

Iron Nickel Alumina Bauxite Aluminium Copper Gold Phosphate Zinc Niobium
*Forecast

Iron Nickel Alumina Bauxite Aluminium Phosphate Copper Gold Aggregates Zinc Niobium Kaolin
5.534 3.546 2.600 1.500 2.026 2.519 1.795 2.200 2.242 2.057 2.013 2.739 1.547 979 1.000 424 250 150 150 150

37.341 31.565

invesTmenT in mining secTor


Evolution of forecast investment in the Mining Sector US$ billion

60 50 40 30 20 10
jan-07 mar-07 mai-07 nov-07 jan-08 set-07 mar-08 mai-08

48 28 32 25

57 47

20102014 20092013

50

Investment in Mining Sector from 2008 to 2012 US$ 57 billion New investments in the Mining Sector from 2009 to 2013 US$ 47 billion
set-08 nov-08

jul-07

jul-08

jan-09

mar-09

Geological survey
The mineral potential in Brazil is extraordinary. At present, only 30% of the countrys immense territory has been studied thoroughly through geological surveys. Indigenous territories, which correspond to 13% of this territory and to 25% of the Amazon Region, are among the areas that may soon have their mineral potential evaluated, in addition to the strip of ocean located on the Brazilian continental shelf. The chart reveals that the demand for geological surveying in Brazil has been restrained. To illustrate this point, observe that although its total area is close to seven times that of Peru, Brazil has invested only half of the amount that Peru has invested in geological surveys.

invesTmenTs in mineral eXploraTion in The 10 leading coUnTries (invesTmenTs By The 10 leading coUnTries represenT 68% of The BUdgeT in 2009) ToTal: Us$ 8 Billion

Other countries 32%

Canada (US$ 1,3 billion) 17%

Australia (US$ 1,08 billion) 14% Brazil (US$ 0,234 billion) 3% South Africa 3% China 4% Chile 4% Russia 5% USA 7% Peru 6% Mexico 5%

Discover Brazilian mining with IBRAM


IBRAM Instituto Brasileiro de Minerao (www.ibram.org.br) Brazilian Mining Association is the national representative organization of those companies and institutes that are active in the mining industry. It is a highly active and visible private, non-profit association with the following mission: To bring together, represent, promote and publicize the Brazilian mineral industry, and contribute to its competitiveness; To collaborate with public authorities, promoting technical studies; To encourage sustainable development and the use of improved occupational safety and health practices in mining activities; To stimulate studies, research and development, innovation and the use of the best technologies available; To defend the interests of the mineral industry.

The Brazilian Mining Association


SHIS QL 12 Conjunto 0 (zero) Casa 04 Lago Sul Braslia/DF Brazil Zip Code: 71.630-205 Phone: 55 - 61 - 3364.7272 Fax: 55 - 61 - 3364.7200 ibram@ibram.org.br

IBRAM

KNOW MORE ABOUT IBRAM IN THE INTERNET

www.ibram.org.br

iBram
Private, non-profit organization that represents the Brazilian Mineral Industry Founded in 1976 Brings together 160 companies [mining and non-mining] Represents more than 85% of Brazilian Mineral Production institutional commitment: To contribute to sustainable development in the Brazilian Mineral Industry, and generate wealth and social benefits while preserving the environment.

Employment
The total labor employed (direct jobs) in mining in 2009 reached 155 thousand workers in Brazil. Once the worst of the international economic crisis passed, Brazilian mining companies began hiring again en masse. Studies carried out by the Ministry of Mines and Energy have shown that the multiplying eect of jobs is 1:13 in the mining sector. That means that for each job posting in mining, thirteen others are created along the production chain. Therefore, one can consider that minerals created about 2 million jobs in 2009, without taking into consideration those jobs created in the research, prospection, and planning phases or the labor occupied in the mining settlements (garimpos).
The imporTance of mining on JoBs creaTion
16 12 8 4 0 2
Suppliers Mining Industry First Transformation Total

governance
Board of directors comprised of representatives from mining companies executive Board comprised of three chief members the President - CEO, a Director for Mining Issues and a Director of Environmental Issues

iBram parTicipaTes in The folloWing inTernaTional insTiTUTions


ICMM International Council on Mining and Metals SIM Inter-American Mining Society (Sociedade Interamericana de Mineria) OLAMI Latin American Mining Organization (Organismo Latinoamericano de Minera) The World Economic Forum

14

iBram amaznia and iBram minas gerais


In addition to having headquarters in the countrys capital of Braslia, IBRAM maintains regional offices, one located in the state of Minas Gerais, the largest producing state in the country; and another located in the heart of the Amazon Rainforest, in the state of Par. The organization plans to open three more regional offices over the next three years in other states which have shown increased mineral production: Bahia, Gois and Rio Grande do Sul.

11

Employment Generation MULTIPLIER EFFECT

1:13

Generates 2 million direct jobs in Brazil (155,000 = the mining industry) Date 2009

Special Programs for Mining


IBRAM promotes institutional actions to insure improved competitive conditions for mining companies through its Special Programs and Permanent Committees such as the Legal Committee.

conim - mining committee for international standardization


Established in 1994, this special program has been acting as an interface between the mining sector and two standards organizations: at the international level, ISO - International Organization for Standardization and, at the national level, ABNT - The Brazilian Association for Technical Standards. The work of three ISO Committees has been object of CONIMs developments: ISO/TC 102 - Iron ores and direct reduced iron, ISO/TC 155 - Nickel and nickel alloys and ISO/TC 183 Copper, lead, zinc and nickel ores and concentrates. Once International Standards incorporate the consensus among the practices and interests of the commercial parts involved, the active participation in their development are of utmost importance, especially for an exporting sector such us the Brazilian mining. The result of this work is a series of procedures to be used to qualify and thus give value to commercial lots. Through CONIM, IBRAM maintains the leadership of 13 international technical groups, the ISO Secretariat of the Iron Ore and Direct Reduced Iron/Physical Testing Subcommittee, the Secretariat of the Brazilian Committee of Iron Ores and of the Brazilian Commission of Cupper and Nickel Ores, Concentrates and Primary Products, as well as the Secretariats of several ABNTs groups.

special program for safety and occupational health MinerAO


In 2007, IBRAM created the Special Program for Safety and Occupational Health MinerAO. Its objective is to reduce the number of work-related accidents in the mining sector by implementing a series of safety measures, such as exchange and training programs; in addition to creating a database of the best practices in the sector, which will serve as a guide for prevention programs. It is estimated that by the end of the year of 2010 the program will be in operation. IBRAM plans to turn this Program into a national reference in Occupational Health and Safety. In order to take part in the program, mining companies must adhere to the programs guidelines and promote the exchange of good practices with other participating companies in the context of social responsibility and sustainable development in the sector.

Tailing dams safety program


Aware of the mining industrys responsibility to protect and conserve the environment and reduce socio-environmental and economic risks resulting from tailing dams accidents, IBRAM has created the Tailing Dams Safety Program, a pioneering initiative being implemented on a national scale. The Programs objective is to train professionals in the mining, governmental and civil society sectors in best practices for tailing dams safety, by making available modern management tools and strategies.The program expects to contribute decisively to reducing the number of accidents and incidents that occur at these dams.

management of Water resources perh


Management of Water Resources (Programa Especial de Recursos Hdricos) - PERH is an initiative developed by IBRAM in 2000, with the aid of a host of supporting companies with a long history of important achievements, particularly in the implementation and tracking of the National Water Resources Policy, by way of IBRAMs active participation in the National Council of Water Resources and its Technical Councils. Together with the National Water Agency, PERH edited the book Water Resources and Mining Management (A Gesto dos Recursos Hdricos e a Minerao), which has been widely published in Brazil. With the dynamic implementation of the National Water Resources Policy, new players from state, regional and local levels have adopted its norms at an ever increasing pace, a situation which has resulted in new challenges for mining and have pointed to a greater need to increase the scope and improve the strategy in support of PERHs activities. Because of this, IBRAM decided to reinforce PERH, which resulted in the elaboration of more ambitious planning to allow the Program to broaden its scope. IBRAM sees this opportunity as a benchmark for issues related to sustainable development in mining, since it provides its participants a strategic view of the use of water resources. Beyond that, it may be able to promote a positive image of the sector regarding environmental issues.

Participate in the most important events in Brazilian mining


sponsored By iBram
eXposiBram international mining exhibition and Brazilian mining congress (Exposio Internacional de Minerao e Congresso Brasileiro de Minerao) www.exposibram.org.br Every two years these events bring together more than forty thousand people every day and hundreds of exhibitors from countries all over the world. eXposiBram amaznia international mining exhibition of amazon and mining congress of amazon (Exposio Internacional de Minerao da Amaznia e Congresso de Minerao da Amaznia) www.exposibram.org.br These events are held every two years in the Amazon region. They promote sustainable mining in one of the most important areas on the planet with the greatest mineral potential in the world. Though only a small portion of this region has been the target of systematic geological surveys on an adequate scale, what has been discovered to date in terms of high quality, large-scale mineral deposits attests to this affirmation. Brazilian open pit mining congress, Brazilian Underground mining congress and mine closure Workshop (Congresso Brasileiro de Mina a Cu Aberto, Congresso Brasileiro de Mina Subterrnea e Workshop Fechamento de Mina) www.ibram.org.br/VIcbminas These are annual events held in the city of Belo Horizonte, capital of the state of Minas Gerais, from the 3rd to 5th of August, that showcase the technical achievements of Brazilian mining. international congress of mining rights (Congresso Internacional de Direito Minerrio) www.ibram.org.br The first of its kind is to be held in the city of Salvador, capital of the state of Bahia, on the 7th and 8th of June. The congress is a partnership between IBRAM and the Brazilian Ministry of Mines and Energy and the office of the Brazilian Solicitor General, an agency linked to the Presidency of the Republic of Brazil. The events main objective is to intensify the debate on International Mining Rights.

EXPOSIBRAM 2009

EXPOSIBRAM 2009

iBram The Brazilian mining association


SHIS QL 12 Conjunto 0 (zero) Casa 04, Lago Sul Braslia/DF Brazil Zip Code: 71.630-205 Phone: 55 - 61 - 3364.7272 Fax: 55 - 61 - 3364.7200 ibram@ibram.org.br Know more about ibram in the internet: www.ibram.org.br