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IRON ORE PRICES SURGED TO THEIR HIGHEST LEVEL IN ALMOST A YEAR LAST WEEK, ABOVE $111 A TONNE, AMID A SHORTAGE OF WORLD SUPPLY AS CHINA REOPENS ITS ECONOMY

High prices of iron ore and gold will help the mining industry in Brazil to keep revenues in 2020 similar to 2019, despite the impact of the novel coronavirus, according to the Brazilian mining association (Ibram).

In Q2 2020, mining companies reached a production value of R$39 billion ($7.5 billion), an increase of 9% over Q1. Iron ore represents 59% of Brazil’s mineral production, with gold second (14%), followed by copper (8%).

Brazil’s iron ore exports in Q2 2020 totaled $5 billion, 6% higher than Q1 2020, but 5% lower than in Q2 2019. The country exported 76 million tonnes, 8% above the total registered in the Q1 2020, but 3% lower than Q2 2019.

Brazilian miner Vale said on Monday that its second-quarter iron ore production totalled 67.6 million tonnes, up 5.5% from a year earlier and 13.4% higher than the first quarter.

The result comes soon after iron ore prices surged to their highest level in almost a year last week, above $111 a tonne, amid a shortage of world supply as China reopens its economy. China has been boosting imports for the key steel ingredient.

Brazilian gold exports in Q2 2020 totaled $ 1.1 billion, 11% above the value
registered in the Q1 2020, and 32.5% higher than in Q2 2019.

Investments not impacted

Ibram says that investments in Brazil’s mining sector should not be impacted by the pandemic. The mining association expects investments of $32.5 billion until 2024, with other $2 billion directed to the safety of tailings dams.

Environmental licensing, geological research and investments in logistics are still challenges.

“We have 81% of our exploration in just two states, Para and Minas Gerais. We still need to invest in mineral exploration,” said Flavio Penido, president of Ibram.

“We are taking longer than necessary for new concessions in the transport sector. While the price of iron ore freight from Australia to China is $7.7 per tonne, from Brazil [it] is $18.”