13/11/08

Shrinking investments in the order of 90% in Pará state in the last few months due to the global financial crisis have Brazilian mining institute Ibram worried, institute president Paulo Camilo Penna said in a statement.

According to Penna, the bulk of investments in Pará come from junior companies, mostly based in Canada, that have been negatively affected by falling equity on the Toronto Stock Exchange (TSX).

“As we all know most of junior companies` projects in the Tapajós basin are funded on the TSX, which in recent months has been suffering strong declines,” said Penna. “Our ongoing challenge now is much greater because of what is happening in the Tapajós Basin. We run the risk of facing the `death curve` and see a steep decline in mineral research and prospecting in the country.”

Penna is urging the Brazilian government, academia and private enterprise to step up and join together to assure the necessary financial resources.

The Ibram president added that, in addition to diminishing Canadian investments, Brazilian mining businessmen relinquished control of their companies and opted to use mechanisms such as financing from abroad. He said this could have been avoided if the Brazilian government had helped obtain financial resources.

“Ibram has been for three years asking the Brazilian government to allow mining rights to be offered as legal guarantees in the funding of projects,” he said.

New tax proposals are also burdening the industry. “We should also be looking to diminish the heavy tax burden on Brazilian mining,” he said, stressing that he believed Brazilian mining companies are already the highest taxed in the world.Claudio MendonçaBusiness News Americas

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