Sao Paulo, Brazil, 19 Feb – Brazilian iron ore producers are set to invest US$ 14.130 by 2011 although demand for the product will remain high, the chairman of the Brazilian Institute for Mining (Ibram), Paulo Camilo, has told macauhub.
Camilo said impact of investments on production would not be sufficient to ease the trend for rising iron ore costs on international markets as even with investment in mining “high demand will remain.”
Brazilian investments in mining ventures between 2007 and 2011 are forecast to reach US$ 32 billion. Some US$ 14.130 billion of this will be targeted at iron ore projects, according to figures from Ibram, which comprises national and overseas firms operating in Brazil.
In addition to direct investments related to mining the figures include expenditure on infrastructures for exports like the Carajas railroad being financed by Brazil’s CVRD. Other investments in the Brazilian iron ore are expected to be made by firms including EBX, MHAX and London Mining.
Camilo said these fresh resources “will have a strong impact on increased mineral production” in Brazil, but China’s growth will continue to absorb the raw material, as currently is the case.
“Today there is no (iron ore) stock availability in any part of the world, not just due to Chinese demand but also because of firms’ inabilities to invest more in production” to respond to this demand, said the Ibram chief.
If the predicted investments for between 2007 and 2011 are correct, they will represent a 314 percent increase over those made between 2002 and 2006, worth US$ 3.410 billion according to figures from the National Department of Mineral Production.
In 2006, Brazil produced 317 million tons of iron ore to occupy second place behind China in the world ranking of producers with an 18.5 percent market share. Ibram predicts that Brazilian production will reach 581.3 million tons in 2011, an increase of 83.37 percent compared to 2006 when the last figures were compiled.
Brazil is the third largest supplier of iron ore to China, the world’s largest consumer of the raw material and responsible for around 40 percent of world imports. The Chinese Commerce Ministry recently announced that Brazil’s iron exports to China increased 6 percent in 2007 to reach a record 105 million tons.
Even the possibility of a United States recession will not dent the growth in demand for iron ore, according to Camilo, as “important international actors like China, India and Germany will continue to expand.”
“It is to be hoped that there will be a compensation of growth in other countries,” said Camilo, underscoring that Brazil also has a trend for high consumption due to the government’s Growth Acceleration Program. (macauhub)