Transcript Slide 1

Investment Opportunities
in Brazil
IBRAM – The Brazilian Mining Association
Expo 2010 Shanghai China
05/July/ 2010
Paulo Camillo Vargas Penna
IBRAM- Brazilian Mining Association
 Non-profit private organization that represents the Brazilian
Mineral Industry;
 Founded in 1976;
 Congregates 182 companies [mining and non-mining];
 Represents more than 85% of the Brazilian Mineral Production
(US$ 24 billion in 2009 – excluding oil and natural gas).
 IBRAM has two regional offices in the States of Minas Gerais
and Pará. The Headquarters is located in Brasilia - Capital of
Brazil.
INVESTMENT OPPORTUNITIES IN BRAZIL
 Opportunities in Mining Sector
 Opportunities in Mining Infrastructure
 Opportunities in Mineral Exploration
 New challenges in Mining in Brazil
Opportunities in mining sector
Economic Perspectives
Drivers of demand
Urbanization of the World Population
China
World
5,5
1,0
5,0
bilhões de pessoas
0,8
população
Rural rural
0,5
população
Urbanurbana
4,0
Rural rural
população
3,5
3,0
2,5
2,0
Urbanurbana
população
1,5
0,3
1,0
0,5
30
25
20
20
20
15
20
05
10
20
20
00
20
95
20
90
19
85
19
80
19
75
19
65
70
19
19
60
19
55
19
19
19
25
20
15
10
05
00
95
90
85
80
75
30
20
20
20
20
20
20
20
19
19
19
19
19
65
60
70
19
19
19
55
19
50
50
0,0
0,0
19
bilhões de pessoas
4,5
The 5 largest Economies
Current comparison and a project for the year 2050
US$ trillion
2050
2009
$80
$70
$60
$50
$40
$30
$20
$10
$0
China
USA India Brazil
Fonte: Goldman Sachs, september 2008
Rus
USA Japan China Ger
UK
Brazil in a Global Context
Pop > 150 million
Area > 5 million Km²
Bangladesh
Nigeria
Russia
Pakistan
USA
Indonesia
BRAZIL
Australia
Japan
China
India
Canada
Mexico
Spain
United
Germany
Kingdom
Italy
France
South Korea
GDP > US$ 1 trillion
BRAZIL-Social and Economic Overview
LONG-TERM TRENDS – 5-YEAR AVERAGES
2000-04
2005-09
2010-14
Population (million):
174.6
185.4
200.6
GDP (USD bn):
566.8
1,346
2,222
GDP per capita (USD)
3,244
7,240
11,062
GDP growth (%)
3.0
3.6
4.8
Inflation (%)
8.7
5.1
4.6
38.9
14.7
11.9
External Debt (%of GDP)
Land Area (km²) – 8,511,965
Opportunities in mining sector
Evolution of The Brazilian Mineral Production
in US$ Billion
Forecast 2010
US$ 35 billion
2008 = US$ 28 Billion
35
25
2009 = US$ 24 Billion
20
Variation 2000/2008
15
250%
10
5
0
Year
78
80
82
84 86
88
90
92
94
96
98
00
02
04
06
08 09 10
Not included oil and gas
Estimates are for the Brazilian Mineral Production to
reach US$ 35 Bilion in 2010
Main Brazilian Mineral Provinces
Vila Nova
Borborema
Bacia do Reconcavo -Tucano
Centro-Sul Baiano
Rondônia
Bacia do Bambuí e Espinhaço
Meridional
Rio do Peixe
Maciço
de Goiás
Bacia do
Paraná
Opportunities in mining sector
Escudo Sul Rio Grandense
Brazilian Status on the Mineral Global
Market
Exporter
Global Player
Exporter
Self Sufficiency
Importer/
Importer
Producer
Niobium (1st)
Nickel
Iron Ore (1st)
Magnesium
Bauxite (2nd)
Kaolin
Manganese (2nd)
Tin
Graphite (3rd)
Vermiculite
Crysothile (4°)
Chrome
Tantalum (2nd)
Mica
Dimension
Stone (4°)
Opportunities in mining sector
Limestone
(cement)
Industrial
Diamond
Titanium
Gold
Phosphate
Zirconite
Diatomite
Copper
Metallurgic
Coal
Sulfur
Potash
Rare Earth
Elements
Tungsten
Talc
Zinc
Opportunity?
Major mineral products imported in 2009 and 2008
2009
Total Brazilian Imports
Mineral Primary Goods Imports
127.647
S*
2008
-
173.196
S*
∆ 09/08 %
-
(26,30)
5.497
4,3
9.729
5,6
(43,50)
Metallurgic Coal
2.181
40
3.691
38
(40,91)
Potassium
2.060
37
3.828
39
(46,19)
Sulfur
197
4
1.039
11
(81,04)
Phosphate
Outros
84
561
2
10
312
1.019
3
10
(73,08)
(44,95)
Brazil Trade Total Balance
Mineral Trade Balance
* Share in total Export/Import
Opportunities in mining sector
25.347
12.599
24.746
49,7
13.113
2,43
53,0
(3,92)
Investments in Mining Sector 2010 a 2014
Evolution of investments estimates in the mineral sector in
US$ billion
Crisis
New investments in the Mining Sector from 2010 to 2014 – US$ 54 billion
31.565
Iron
Ore
Nickel
Alumina
Bauxite
Aluminium
Opportunities in mining sector
Phosphate
Copper
Gold
Manganese
Vanadium
44
270
300
979
1.401
2.739
2.357
2.057
2.510
2.200
2.200
2.519
987
1.500
1.000
3.546
Investments in Mining Sector from 2009 to 2013 – US$ 47 billion
6.716
36.530
Investment in Mining Sector 2010 to 2014
Coal
Opportunity in infrastructure
Brazil is one of the countries with the highest mineral
potential in the world.
Abundant geological potential to be explored in an
8,514,876.599 km2 continental extension
Infrastructure undergoing an expansion process
Skilled labor creates an environment conducive to the growth
of mining and metallurgy in the country.
A country with ample tradition in mining
An enormous territory with the potential for great mineral
reserves
Opportunities in infrastructure
Annual investments necessary in infrastructure in BRAZIL
BRAZIL
Transportation and
Logistics
US$ 13,5
It is necessary to
invest US$ 90 billion
per year in
infrastructure
ENERGY
US$ 16
Oil and Gas
Sanitation
US$ 7,5
Telecommunications
US$ 42,5
US$ 11
Opportunity in infrastructure
Source: Brazilian Association of infraestructure -Abdib
Indicative areas for port
installation and expansion
Opportunity in infrastructure
Ports
New areas for port facilities
Natural vocation for port activities
Hydrography
South America
Brazil
Brazil’s Main Hydrographic Basins
Amazônica
Araguaia-Tocantins
Parnaiba
Milions of Tons
Transported
472
São Francisco
Atlântico Sudeste
22
Paraguai
Paraná
Mississippi
Atlântico Sul
Opportunity in infrastructure
USA
Brazil
Opportunities in Mineral Exploration
Mineral Exploration Investments by the 10 Leading Countries
2009
Canada
(US$ 1,2 billion)
16%
Australia
(US$ 1 billion)
13%
BRAZIL
(US$ 234 million)
3%
Opportunities in mineral exploration
Source: Metals Economics Group
Opportunities in Mineral Exploration
2004 – 2008 Program:
mapping 30% of the Brazilian
Territory focused on mineral
potential areas.
LEGEND
Sedimentary areas
Basement areas
Program
2004-2008
PREVIOUS MAPPING
PROGRAM
Maps 1:100.000
Maps 1:250.000
Maps 1:100.000 (283)
Maps 1:250.000 (94)
NEW CHALLENGES IN MINING
New Challenges
Mining in Indian Lands
Indigenous Areas:
13% of National Territory
25% of the Amazon Region
Mining Process
Indigenous Areas
New Challenges
Brazilian Continental Platform
Territory emerged
8.500.000
Exclusive economic zone
3.500.000
Extension of the continental
platform referred to the UN
1.000.000
Total area of continental and
marine
13.000.000
Aggregates
Gold
Diamond
Coal
Phosphate
Cobalt
Others
New Challenges
Modification of Monopoly - exploration and mining of Nuclear Ores
Inasmuch as Brazil has only
30% of the territory prospected
for Uranium, the country ranks
as the 7th richest nation in the
world in this mineral.
Currently Brazil has a reserve
of 310 thousand tons, but there
are estimates that it has more
than 800 thousand tons, which
will bring the country to rank
the second or third largest
reserves in the world.
Investment opportunities in the BRAZIL
Conclusion
BRAZIL TODAY
 Macroeconomic stability
 Sustainable growth
 Need to expand and improve its infrastructure
 Needs to increase the area of geological and geophysical
mapping
 Great opportunities for investments in mining companies
Thank You
http://www.ibram.org.br
Paulo Camillo Vargas Penna
President