References

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CPFL Energia is a holding company in Brazilian electricity sector, operating through its subsidiaries in ...
Copersucar S.A. is the largest Brazilian sugar, ethanol and bioenergy company and a significant player in...

Brazil Mining Industry

Brazil is the world’s ninth-largest country and has rich reserves of important metals such as bauxite (Aluminum), iron ore, niobium and nickel.  Brazil is also a leading producer of precious metals such as gold. Mineral products and mining account for 2% of Brazil’s GDP.  The iron ore is the most important in Brazilian exports, enabling the country to earn revenue of approximately $2.3 billion.  Brazil is also the largest exporter of tin, lithium, niobium, bauxite and manganese, which contribute to overall revenues of mineral exports.

The current financial conditions in Brazil are favorable for mineral exports. Brazil has a wide range of geological environment and approximately half of the region has Precambrian terranes.  The younger sediments have deposits of coal while continental sediments (Parana and Parnaiba basins)  have deposits of  uranium and  barite. The cratonic areas have sedimentary rocks for deposits of iron, manganese, gold, silver and other base metals. There are massive iron ore reserves found in Carajás and Quadrilátero Ferrífero, which cover parts of an Archaean craton. The  diversity of geological environments gives Brazil the biggest mineral potential in the world.

Brazil’s Government aims to attract new investment in mining industry for diversification. The Government is seeking external investment in mining industry for developing a wide range of geological resources. The mining sectors earn a considerable amount of revenue for the state and also provide large numbers of jobs.

The government of Brazil welcomes investors to the mining sector in the state as it understands competition is necessary for sustainable development. The government intends to develop a production chain that integrates mining and industry.

Many leading global mining groups have invested in Brazil’s mining industry. CVRD is investing approximate $1.5 billion in seven projects in Brazil to increase its iron ore production capacity.

Brazil Steel Industry:

Brazil is one of the leading steel producers of the world. The Brazilian steel industry uses the latest technologies in steel production. Due to easy availability of iron ore and low set-up costs, many companies are shifting their base from European countries to Brazil. Approximate 43% of the steel produced in Brazil is exported. The majority of exports go to China.

The factors that are advantageous for investors to set up in the steel industry in Brazil are:

 

  • Abundance of raw material such as iron ore, and non-renewable energy such as charcoal and coke, that is required for steel production.

 

  • Labor in Brazil is cheap in comparison to OECD (Organization for Economic Co-operation and Development) countries.

 

  • Availability of advanced technology in steel production.

 

The sound fiscal policies of Brazil’s Government have played an important role in attracting Foreign Direct Investment in the mining sector. The government promises equal protection and guarantees to foreign investors that is also provided to domestic investors. The government allows foreign investors to transfer registered capital and earnings to their home country on a tax-free basis. The government also provides tax incentives and tax mechanisms to lower the taxes payable by foreign investors.

The abundant availability of raw material, low currency conversion rates against American dollars and various tax incentives make an investment in Brazil metal industry more profitable.

 

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Brazil Steel Industry:

Brazil is one of the leading steel producers of the world. The Brazilian steel industry uses the latest technologies in steel production. Due to easy availability of iron ore and low set-up costs, many companies are shifting their base from European countries to Brazil. Approximate 43% of the steel produced in Brazil is exported. The majority of exports go to China.

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The factors that are advantageous for investors to set up in the steel industry in Brazil are:

 

  1. Abundance of raw material such as iron ore, and non-renewable energy such as charcoal and coke, that is required for steel production.

 

  1. Labor in Brazil is cheap in comparison to OECD (Organization for Economic Co-operation and Development) countries.

 

  1. Availability of advanced technology in steel production.

 

The sound fiscal policies of Brazil’s Government have played an important role in attracting Foreign Direct Investment in the mining sector. The government promises equal protection and guarantees to foreign investors that is also provided to domestic investors. The government allows foreign investors to transfer registered capital and earnings to their home country on a tax-free basis. The government also provides tax incentives and tax mechanisms to lower the taxes payable by foreign investors.

The abundant availability of raw material, low currency conversion rates against American dollars and various tax incentives make an investment in Brazil metal industry more profitable.