According to a report by BNAmericas, the Brazilian Mining Institute (Ibram) forecasts that mining companies in Brazil will collectively invest a total of 50 billion U.S. dollars from 2023 to 2027.

　　On Tuesday, Ibram released these forecast figures at a press conference.

　　This figure represents the highest level of project investment since the $53.6 billion recorded from 2014 to 2018.

　　Although iron ore remains the primary investment mineral, other minerals—including copper and nickel—are showing growth.

　“Demand for copper and nickel is set to rise due to the battery and energy transition, but these two minerals have already been experiencing growing demand,” argues Valdir Farias, Executive Director of Flotto, a mining consultancy firm. In electronic devices such as computers, smartphones, and...

The widespread use of tablets has led to an increase in demand for them.

　　Ibram estimates that, from 2023 to 2027, Brazil’s investment in iron ore—the country’s primary mineral product—is expected to reach US$16.9 billion, a 24% increase from the US$13.6 billion invested during the period from 2022 to 2026.

　　During the same period, investment in fertilizer minerals is expected to reach 5.22 billion U.S. dollars, bauxite 4.96 billion U.S. dollars, and gold mines 2.8 billion U.S. dollars.

　　In addition, logistics investments related to the mining sector are estimated at $4.44 billion, while environmental, social, and governance (ESG) investments amount to $6.5 billion.

　　Julio Nery, Head of Sustainability and Regulation at Ibram, revealed in an interview that “most of the investment came from the company’s own funds, with some coming from capital injections by existing shareholders.”

　　Inside sources revealed that logistics investments are primarily directed toward the state of Bahia, where Bahia Mineração (Bamin) is investing in the East-West Railway (FIOL) as well as a port complex named Porto Sul.

　　Bamin is a subsidiary of Eurasian Resources Group, a company based in Kazakhstan.

　　Ibram Chairman Raul Jungmann revealed that the association has held discussions with the Brazilian stock exchange to jointly explore mechanisms that would enable the local capital market to provide more financing for mining projects.

　 “Currently, more than 70 companies operating in Brazil are raising funds for mining projects through the Canadian Securities Exchange, while fewer than 10 domestically listed companies have done so,” Jungmann said.

　　Geographically, 82% of mining investments from 2023 to 2027 are concentrated in three states: Pará, with $13.9 billion; Minas Gerais, with $11.4 billion; and Bahia, with $10.2 billion.

　　New tax type

　　Ibram warned that, in recent months, several states have introduced new mining taxes, and mining investment plans will face challenges.

　　Jungmann believes that mining is a pillar of Brazil's economy, and especially in times of recession, changes to the rules can undermine predictability and legal stability.

　　The risk of lowered investment expectations is significant, and the sustainability of legal mining will also be affected.

　　Juliano Jorge Boraczynski, president of Metamat, a prospecting company based in Mato Grosso do Sul, believes that introducing a new mining tax would benefit these states—both from a tax revenue perspective and in terms of strengthening oversight over mining companies.

　　In December last year, the Mato Grosso State Legislative Assembly approved the Mineral Resource Exploration and Development Fee (TFRM), a tax that will take effect on April 1 of this year. The state government expects this new tax to generate an additional revenue of 200 million reais (US$38.4 million) annually.

　　Outlook

　　In 2022, Brazil's mining industry generated revenue of 250 billion reais, a decrease of 26%. Mineral production totaled 1.05 billion tons, down 12%.

　　Last year, the Brazilian mining industry directly employed 204,000 people, up from 198,000 in 2021.

　“The global economy still faces numerous uncertainties, and we expect Brazil’s mining performance to be very similar to that of 2022,” Jungmann predicted.

　　China is Brazil’s largest importer of iron ore, manganese, and niobium; its second-largest importer of copper, natural gas, and decorative stones; its fourth-largest importer of aluminum; and its fifth-largest importer of kaolin. The positive outlook for China’s economy is conducive to the recovery of Brazil’s mining sector.