During January, the world watched as seasonal rains wreaked havoc in the Southern Hemisphere. Flooding in Australia displaced thousands in Queensland and damaged the infrastructure within the province. At about the same time, mud slides ravaged Brazil. Both of these regions play a significant role in the mining and steel sectors, and our thoughts and prayers are with all of those who have been affected and we wish them a speedy recovery.
This is another one of those hefty editions of E&MJ thanks to a special 48-page report on Brazil (see p. 49). Once word of the report, a cooperative effort with Global Business Reports, began to circulate, the size and scope grew to Brazil-like proportions. In addition to thriving petroleum and agricultural production, the country possesses vast mineral wealth (more than iron ore). More recently, the decisions to host the 2014 World Cup and 2016 Olympic Games in Brazil have propelled the country’s status on the world stage. There is no denying Brazil’s economic and political clout.
The South American giant is the second largest producer of iron ore worldwide. Headquartered in Rio de Janeiro, Vale is the largest iron ore producer in the world. It has leveraged its iron ore position to establish itself as the second largest mining company. The company has its own railroad for hauling ore from the mines to its fleet of ships, which hauls it to customers mainly in Asia. More than iron ore, Vale has diversified into other minerals operating in 38 countries and it currently employs more than 115,000 people. Oddly enough, outside mining circles, Vale has been referred to as, “the biggest company you have never heard of.”
Even though the country boasts more than 70 mined commodities, as readers will discover, it’s not the easiest place to do business or to start a mine. One long time executive in the alumina business cautions that Brazil must be analyzed patiently by those investing in emerging markets. The report details how the country is working to improve its image to attract more mining investment and showcases many of the emerging players in the mining sector.
This edition also carries the annual Project Survey (see p. 28), which is compiled by our colleagues at Raw Material Group in Sweden. The survey lists all of the major projects in the mining pipeline. It serves as a leading indicator for the mining business. This year the Project Survey bears good news —in recent years it hasn’t. It’s especially cool when the authors are surprised at how quickly the market improved. Latin America regained its position at the top of the list in 2010, attracting more than 32% of total global investment. Iron ore, copper, gold and nickel, were ranked in that order as the most important investment targets for mining companies, representing 84% of the total project pipeline. Iron ore investment surpassed copper.
As this edition was going to press, iron ore prices were starting to climb to the peak levels seen just before the financial melt down in 2008-2009 (Markets, p. 120). So it may come as no surprise to E&MJ readers to see news items on Cliffs Natural Resources acquiring Consolidated Thompson (News, p. 4) or Rio Tinto expanding in the Pilbara (News, p. 16). As global economic prospects improve, iron ore miners are gearing up for another bull run, but they are not the only miners preparing for robust demand. They are leading a pack that will probably see considerable prosperity in the years ahead. Enjoy this edition of E&MJ.
Steve Fiscor, E&MJ Editor-in-Chief,