News

20/10/23

Reduction in production, in tons, and fluctuation in international prices generate lower results, in dollars, compared to the 3rd quarter of 2022. IBRAM highlights risks in the business environment of mining companies and announces sectoral decarbonization project.

The estimated revenue of the mineral sector fell by almost 29% in the 3rd quarter, compared to the same period last year: it fell from R$75.8 billion to R$53.9 billion. In the 2nd quarter of 2023, revenue had also been higher: R$65.3 billion, which represents a reduction of 17.5%. The mineral sector has been accumulating drops in revenue, mainly since the 3rd quarter of 2021. The revenue data for the 3rd quarter of 2023 is estimated, since the ANM operating value data disclosure website is located outside the air, for some time now.

Total mineral exports also fell in the 3rd quarter compared to the same period in 2022: 4.5% in dollars; but grew 3.5% compared to the 2nd quarter of this year. In terms of tons, there was an increase in both comparisons: 3.3% and 10.2%, respectively. The main exported product, iron ore, showed a price increase of 5.5% and an increase in tons of 11.4% in the 3rd quarter compared to the 2nd quarter; however, it showed a drop of 3.2% (in dollars) and an increase of 3.4% in tons, compared to the same period last year.

Job creation continues to rise in the mineral sector. In August of this year, the mining industry had 208,800 workers directly employed. In August 2021 there were 198 thousand; in August 2022 there were 203.4 thousand workers; in January 2023 there were 201 thousand.

The performance of the mining industry was presented this Wednesday (10/18) by the Brazilian Mining Institute (IBRAM). For the Institute, the 3rd quarter results reflect variations in production in tons and fluctuations in international mineral prices. In addition to the significant drop in revenue, costs for mining companies continue to rise, recalls IBRAM’s CEO, Raul Jungmann, who presented the data in a press interview.

These are costs related to the creation of fees by municipalities and states, charged to mining companies, in significant amounts, under the pretext of promoting inspection actions. The values ​​are arbitrated without any analysis of the mining companies’ capacity to absorb the fees. According to IBRAM, the collection of these charges can reach R$6.3 billion per year, approaching the value collected from CFEM (royalty from the mineral sector).

“This is a very serious issue because it harms the competitiveness of Brazilian mining companies in relation to international competitors, inhibits new investments, generates insecurity and unpredictability in company management. This situation affects the sector’s performance and is automatically reflected in the collection of taxes and charges and can also affect the Brazilian trade balance”, he says.

In the 3rd quarter, the IBRAM survey shows that the sector saw its collection of taxes and charges shrink by 30%, as well as revenue: it fell from R$26 billion in the 3rd quarter of 2022 to R$18.3 billion in the 3rd quarter of 2023. This account includes CFEM. This specific collection fell 23%, from R$2 billion to R$1.5 billion, compared to the same period last year. These values ​​had been higher in the 2nd quarter of 2023: total taxes of R$22.5 billion and CFEM of R$1.9 billion.

In addition to the recent fundraising measures in the mineral sector, the strike by the National Mining Agency (ANM) and the fragile situation in which the agency finds itself in terms of personnel, equipment and budget fuel a negative scenario for the development of the mining industry. . “Mining companies need to rely on the regulatory and supervisory agent to act in line with their reality and perspectives, but this has not been the case for a long time, since the ANM has limited budgetary resources”, says Jungmann, remembering that municipalities where mining is relevant to the local and regional economy have complained about the lack of transfer of CFEM values.