BRICS mining: the lay of the land – by Chris Lo (Mining – January 5, 2012)

The so-called BRICS nations (Brazil, Russia, India, China and South Africa) are the world’s emerging powerhouses, in more ways than one. As well as exerting an ever-growing influence on the global political stage, these burgeoning economies are building up an industrial base that is closing the gap with the developed western world – or, in some cases, even surpassing it.

No sector illustrates this process better than mining. Competition from low-cost, large-scale mining projects in the BRICS nations has simply been too much for many European and US operations, which are struggling with higher overhead costs and more complex regulatory regimes. As a consequence, countries such as Brazil and China have become hotbeds for international investment.

BRICS countries look outward

BRICS mining investment, however, isn’t just a one-way street – increasingly, these countries are looking to tap into overseas resources in addition to their own domestic deposits. Indian companies including Adani Mining and Lanco Infratech have been assertively investing in Australian coal mining projects, while Brazilian iron ore giant Vale’s funding of iron ore projects in China proves that there are lucrative opportunities in inter-BRICS investment.

In Africa, BRICS countries, particularly China, are becoming more prevalent as investors in new mining projects, both for profit and to provide materials for massive infrastructure and construction projects. “The most active country in Africa has been China, but it isgradually being caught up by Indian and Brazilian firms. Much of this investment is heading towards West African states, mainly for iron ore and gold production,” noted financial analyst Business Monitor International last year.

But what about the domestic mining markets of these countries? Although the BRICS bloc is the new nexus of the mining world, challenges still remain, especially when it comes to issues such as safety and environmental responsibility. Here we profile the five countries changing the face of the mining world.

Brazil’s stable economic and political situation makes it a prime location for new projects to extract the country’s abundant deposits of gold, iron ore and manganese (a metal that is used in the production of steel and iron among others). Brazil’s well-developed and fertile mining sector is continually reiterated with major investment from at home and abroad.

Global mining company AngloGold Ashanti (headquartered in Johannesburg) announced in September 2011 that it would be investing $250m a year between now and 2016 to upgrade its gold mines at Cuiaba, Corrego do Sitio and Serra Grande and increase its gold production from 420,000oz to 700,000oz during the period. The country is also playing host to new technological developments; Brazil Gold recently partnered with US company Software Sciences Corporation to jointly develop the Unified Pattern Processing (UPP) application for minerals exploration.

This is the kind of investment and innovative technology that will be necessary to overcome the problems that could hinder mining development in Brazil, including inadequate transport infrastructure, hard-to-access deposits and the pressing need to conserve vital eco-systems such as the Amazon rainforest.

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