Brazil mining sector sees strong growth in Q3 2020 - IBRAM
Rising commodity prices, growing demand from China, positive foreign exchange effects, and an upturn in investments have helped drive Brazil’s mining sector in the third quarter of 2020, according to a report by the Brazilian Mining Association (IBRAM).
Total industry revenues totalled £6.8 billion for July to September, while output reached 288Mt, up from 212Mt in the second quarter, and even above the 281Mt produced during the same period in 2019, the report adds, pointing out that this hinted towards a brighter outlook for the remainder of the year.
The report adds that in the year to September, sales reached £17 billion, down from £20.75 billion in the same period in 2019. Iron ore accounted for 63 percent of Q3 revenues (£4.33bn), followed by gold (13 percent), copper (six percent), dolomitic limestone (three percent), bauxite (two percent) and phosphate (one percent), IBRAM’s report says.
In Q3 2020, the biggest increase in revenues compared to Q2 was in dolomitic limestone (+54 percent), followed by iron ore (+37 percent), gold (+ 22 percent), phosphate (+22 percent) and copper (+6 percent). Bauxite revenues were down 17 percent.
With regards to exports and imports, Brazil’s mining trade balance reached a surplus of £7 billion, which is equivalent to 45.5 percent of the country’s total trade surplus in the period. According to IBRAM, iron ore exports totalled £8 billion (108Mt tons) in the quarter and mining imports were £989.1 million (9.3Mt).
Approximately £28.1 billion in mining capex is expected for 2020-2024. Of that, iron ore is expected to account for 40 percent and bauxite 22 percent, the association states, adding investments for minerals used in the manufacture of fertilizers will reach 17 percent of total capex and investments in copper projects, 5.4 percent.
IBRAM also said that from January to August the mining and minerals sector created almost 3,000 direct jobs, giving a total of almost 180,000 posts, with monthly growth being recorded from May onward.
The perspectives for the coming months are also positive.
"The outlook for the coming quarters is to maintain the upward curve in these indicators, provided, of course, that the pandemic or other factors do not interfere with industrial performance in Brazil and in ore-buying markets," says Flávio Penido, IBRAM CEO, in the report.
According to Penido, the recent official launch of the federal government’s mining and development program is a positive step to attract long-term investments, as it sets out goals for planning and implementation of sustainable mining projects.
Penido asserts that the development and expansion of the mining industry in Brazil in the coming years “will take place in a responsible and sustainable way” with increasingly positive indicators in terms of sustainability, operational safety and relationships with communities, among other factors.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.