Mineral sector in Brazil revenue 95% higher in 1st quarter; prices should remain firm – IBRAM

RIO DE JANEIRO, BRAZIL – Brazil’s mineral sector revenue totaled R$70 billion in the first quarter this year, an increase of 95% compared to the same period in 2020, with a boost from prices that should remain firm, and may settle only in 2022, according to the Brazilian Mining Institute (IBRAM).

The strong growth was due to the Chinese economy’s rebound after the coronavirus crisis, as well as to high commodities prices and the depreciation of the real against the dollar, said the president of the Board of Directors of IBRAM, Wilson Brumer.

Mineral production in the first quarter totaled 227 million tons, 15% higher than the same period last year, with a boost in iron ore.

Looking ahead, Brumer believes that commodities prices can remain “strong” as long as there is economic recovery in major consumers such as China, the United States and Europe. However, he believes that values may stabilize.

“It may be that commodity prices continue to rise, but I would say conservatively that the trend is that in 2022 prices will settle down,” said Brumer, while participating in a press conference about the sector’s results in the quarter.

IBRAM also published that Brazil raised R$2.1 billion (US$390 million) in mining royalties (Cfem) in the first three months of the year, an increase of over 100% compared to the same period last year.

“It is important to emphasize that a good part of the Cfem, 60%, goes to producing municipalities… this is often reflected when the HDI (Human Development Index) of mining municipalities is compared with the others,” said the IBRAM CEO Flávio Penido.

Iron ore paid the most royalties in the period, a total of R$1.7 billion, compared to R$787 million the year before. Comparing states, Pará posted the highest revenue, with a total of R$1 billion in the period, compared to R$519 million a year earlier.

Minas Gerais, on the other hand, collected R$881 million in the first quarter, against R$393 million the year before.

Brumer pointed out that the collection of Cfem has been growing every year, reaching R$6 billion last year. “It may be that we have a collection between R$7 billion and R$8 billion this year, but it is just an estimate,” he said.

INVESTMENTS

IBRAM also presented an estimate of investments in the mineral sector in Brazil of US$38 billion between 2021 and 2025, the same amount that had been estimated for the 2020-2024 period.

The state of Minas Gerais has the highest forecast of investments, at US$13 billion. Bahia is expected to receive US$11 billion. Pará should receive US$9 billion in the period.

“Minas Gerais remains strong in its investments, not only in maintenance of current facilities, but also in the environmental area,” said Brumer.

Source: Isto É

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