News

12/03/21

While capital markets have increasingly focused on social requirements, panelists at the Brazil-Canada Exclusive Capital Markets Roundtable yesterday discussed strategies and opportunities to address this new investment environment in the Brazilian mining sector. Most participants praised the experience of developing partnership relations with project stakeholders in the country and highlighted the importance of adopting a holistic approach to achieving ESG goals. Ned Jalil, CEO at Appian Capital Brazil – Mineracao Vale Verde, said that companies shouldn’t focus only on traditional checklists for obtaining project licenses, but also make efforts to be part of the community. He noted that thinking about how mining activities would impact neighbors, farmers, the environment, and local government early on in the company’s operation allowed them “not to only focus on obtaining the license, which was given, but actually involve ourselves with the stakeholders in an early engagement.”

Moderating the event, the CEO at PROACTIVA, Rafael Benke, noted the importance of the exploration phase for obtaining the so-called social license. “This is the primary opportunity to tackle a lot of matters that will potentially occur throughout the operations.” He added that failing to communicate what will be done during the exploration phase may affect trust and the company’s ability to do proper consultation and framing of its presence in that environment. “It’s a very crucial moment for all subsequent activities in the mining activity.”

Jones Belther, Senior Vice President Mineral Exploration & Technology at Nexa Resources, agreed that exploration has a big role in terms of starting smoothly, and maintaining good relations with the community. He mentioned the importance this has added to the assets from an investment point of view. “Investors used to look much more to internal rate of return and the most common pressure nowadays is how is your relation with society, what is the perception of the community of your operation, what is the legacy you are going to leave there in terms of the environment.”

Edson Ribeiro, Director of Exploration Projects at Vale, explained that Vale trains geologists, managers, and the more senior staff in ESG principles, as well as provides tools that allow them to run a social diagnostic for each area that they arrive in. “We don’t have a standard package for all areas, so we can work on the real needs of each community,” he said, adding that having all this information organized in a systematic way prevents the company from, for instance, “talking to somebody who does not represent the community.”

Greg McNab, Partner at Baker McKenzie, stressed that “It’s not every company that figures out the way to communicate exactly what their business is doing in a plausible way.” He applauded Brazil’s approach to incentivizing mining exploration, by providing geological, geophysical, and geochemical information at no cost, as well as helping potential investors to interpreter all this data. “Brazil is making it easier not only to identify opportunities but actually to explore and develop them.” McNab also pointed out the promising scenario for mining exploration. “Never the world has seen governments spending so much on critical societal infrastructure, and the need for critical minerals for the energy transition,” adding that Brazil is in position to take advantage of this new wave.

Nancy Conception, Global Product Market Manager at Vale Base Metals, said “the growth of EVs has created a lot of excitement and attention for nickel and other battery metals like cobalt, lithium,” adding that “there are so many synergies between electrification, carbon reduction, and ESG initiatives, and it’s exciting when we can put all the pieces together.” She also noted the trend of “investment in developing sustainable carbon-friendly mines” in order to bring economically valuable deposits to market.

About “The Brazilian Mining Sessions 2021” – The Brazilian Mining Sessions 2021 is a series of events held online from March 5th and March 11th, 2021, including “The Brazil-Canada at PDAC” series of events, which take place during the 2021 PDAC Virtual Convention. The events focus on the Brazilian mineral exploration and mining industries and are hosted by the Organizing Committee of Brazil PDAC 2021, led by the Brazil-Canada Chamber of Commerce and the Agency for the Development and Innovation of the Brazilian Mineral Sector (ADIMB).

*with information provided by ADIMB.