Mining Sector in Brazil

Brazil is one of the five largest mineral producers in the world and the sector represents a great amount of the country’s GDP. Even during the pandemic, the sector presented a good performance in terms of production and exports. Local companies have announced plans to increase investments to develop more sustainable methods, improved productivity and increase security based on digital solutions. Innovative Finnish companies have an opportunity to explore and enter this huge market through technology.


Brazil is one of the five largest mineral producers in the world, having more than 3,000 mines spread across the national territory. The production of metallic minerals dominates the sector: in 2019, it accounted for about 80% of the total value of the mineral production in the country. Among these substances, eleven correspond to 99.7% of the value of production: aluminum, copper, chromium, tin, iron, manganese, niobium, nickel, gold, vanadium and zinc. The value of the production of these eleven substances totaled BRL 129 billion (approximately EUR 21.3 billion), where iron has a significant participation.

Despite the sector presents expressive results year after year and its high mineral vocation for several commodities, Brazil’s true mineral potential still needs wide evaluation. Until 2019, only 3% of the national territory was mapped, remaining a representative potential for growth.

Even with the difficulties imposed by the pandemic, in 2020 the mining sector reached a turnover of more than BRL 200 billion (approximately EUR 33 billion), around 36% more than in 2019. According to IBRAM (The Brazilian Mining Institute), three factors explain the good performance of the sector:
1. increase in sales due to the growth in China;
2. the rise in prices on the international market due to the decrease in global mineral stocks;
3. the devaluation of the real, increasing export earnings since it is was cheaper for other countries to import from Brazil.

Results in 2021

The mining sector plays a major role in the Brazilian economy and its international trade. In 2021, the total production of the mineral sector reached 1.150 billion tons, an increase of 7% over the 1.073 billion tons of 2020. The mineral sector recorded a 62% increase in revenue compared to 2020, totaling BRL 339.1 billion – approximately € 62.8 billion (excluding oil and gas).

Brazilian mineral exports reached € 55 billion, an increase of 58.6% compared to 2020. The mineral trade balance, of almost € 46 billion, made a crucial contribution to keeping Brazil's trade balance positive in 2021. The mineral balance, which is the difference between exports and imports of ores, is equivalent to 80% of the Brazilian trade balance, which was € 57 billion.

The amount of exports totaled 372.5 million tons, in which iron ore, gold and copper were responsible, together, for 91.8% of exports. China, Malaysia, Japan, Bahrain and Canada are the main destinations for Brazilian mineral exports.

In 2021, imports of minerals increased by 63% in € and 16.3% in tons. Among the major products imported are potash, coal, stones and coatings, zinc and phosphate rock. Canada and Russia are the main potash suppliers to Brazil; Colombia and the USA are the main coal suppliers. 

The mineral sector directly employs 200,393 people, accounting for 8% of the country's total employment, against 6.3% for industry. The investments planned for the mineral sector from 2021 to 2025 total € 39.2 billion, of which € 5.7 billion are socio-environmental investments and € 33.5 billion in production and infrastructure. The main investments planned are in iron ore (€ 12.1 billion), bauxite (€ 6.1 billion) and fertilizers (€ 6.05 billion) in addition to climate actions and railroads and ports.

Impacts of the war on the sector 


The Russian attack to Ukraine made the scenario for the Brazilian economy in 2022 even more complicated: more inflation and less growth, unfavorable for Brazil, which was already dealing with resistant inflationary pressures and weak economic activity.

Besides the economic scenario, one of the most feared practical effects of the crisis was the interruption of the supply of agricultural fertilizers exported by Russia. Brazil is the fourth largest importer of fertilizers in the world and increasingly depends on imported inputs to its agricultural production and meet foreign and domestic demands for commodities, processed foods and biofuels. Among the countries with a large scale of agricultural production, Brazil is the only one without autonomy in the supply of fertilizers, which seems to be a contradiction given the weight of Brazilian agribusiness in international trade.

Given the difficulties imposed by the conflict, in March the federal government announced a National Fertilizer Plan with guidelines to increase investments in production. The objective is to reduce Brazilian dependence on imports from the current 85% to around 45% by 2050. The plan also presents opportunities for emerging products such as organomineral and organic fertilizers (organic fertilizers enriched with minerals, for example) and byproducts with potential for agricultural use, bioinputs and biomolecules, remineralizers (for example, rock dust), nanomaterials, among others.

On the mining sector, the Brazilian Mining Association (IBRAM) reported what would be the three most relevant effects of the war between Russia and Ukraine in Brazil:  fear of a shortage of potash, increase in the prices of iron ore and pellets and a strong appreciation of nickel.

In terms of nickel trading, Brazil could benefit from the global market, as it has estimated reserves of 16 million tons, second only to Indonesia and Australia. The embargo on Russia opened new opportunities for the Brazilian sector: in March, the Brazilian company Vale – a major global mining company - announced an agreement with the US company Tesla, to guarantee the supply of nickel, essential for the production of lithium batteries that are the basis of electric cars. 

Another situation generated by the war that can also favor Brazil concerns aluminum oxide, since the transfer of exports from Russia - the country that has the greatest smelting capacity of this chemical compound - to Australia tends to raise the price of the product in the market. 

The conflict generates a breakdown in the macroeconomic model with regard to the global supply chain, causing instability in commodities on the supply side, leading to shocks in price increases immediately. With high commodity prices, Brazil emerges as a very efficient global exporting competitor. The rise in the price of ore also favors the search for deposits, more in-depth geological studies and portfolios of new projects since the big companies are announcing billionaire investments for the improvement of their industrial parks.