The remarkable success enjoyed by several companies, notably Meteoric (in rare earths), Sigma Lithium (in lithium) and Latin Resources (also in rare earths), has been a contributing factor to the recent intensification of the race for strategic minerals in Brazil, says Luís Maurício Azevedo, the president of ABPM (Brazilian Association of Mineral Exploration and Mining Companies).
Latin Resources in particular quickly completed its full cycle, Azevedo says. It came to Brazil, invested in mineral exploration, and was promptly sold for a good price. This is the normal path taken by junior mining companies, he adds, although it is not the universal rule, because there are some companies that have really intended all along to be mining operators, such as Sigma Lithium and Meteoric, and
others that operate in gold, such as Serabi and Aura Minerals. This means that not all junior mining companies that come to Brazil are looking for a quick sale.
Australian junior mining companies, he says, were initially attracted by the lithium price, which at one point soared to over US$ 80,000 per ton, although by the time they actually arrived in Brazil, the price had already sunk back to around US$ 10,000. That could have meant that these companies would flee the country, he says. But that is not what happened, possibly because companies are betting that lithium is so essential to produce electric vehicle batteries that the price is bound to recover at some point.
A similar trend occurred with rare earths. The success of Serra Verde Mineração, which successfully implemented its project in Goiás, attracted the attention of Australian and Canadian junior mining companies. "And now the same thing is happening with niobium," Azevedo observes. "Until now it had been the general consensus that CBMM held such a dominating role in this market that it practically controlled worldwide production, leaving all other companies fearful of entering the market at all."
Two companies, however, were not discouraged, and have now arrived to meet CBMM on its own ground. "And others will come," Azevedo confidently predicts.
The question is whether Brazil is prepared to welcome these companies and, above all, to offer them a regulatory environment that enables the efficient management of resources and affords a return on investments. "Does Brazil have the capacity to handle the hundred Environmental Impact Reports that will be needed?" he asks, adding that a hundred may be an underestimate, since some of the companies have more than one project. "Any bottlenecks that arise are bound to cause frustration, leading to a slowdown in the capital inflow."
One such bottleneck, he says, is the ANM (National Mining Agency), which has lost many employees and consequently lacks the capacity to keep the paperwork moving. Another bottleneck is that the Agency has not been able to place all the areas available for mineral exploration on the market, since demand is much greater than the number of areas that are made available, at a ratio of almost ten to one. "The first time I counted the number of dossiers held up at the ANM, there were 30,000. By now it is up to 100,000.
UNTIL NOW IT HAD BEEN THE GENERAL CONSENSUS THAT CBMM HELD SUCH A DOMINATING ROLE IN THIS MARKET THAT IT PRACTICALLY CONTROLLED WORLDWIDE PRODUCTION, LEAVING ALL OTHER COMPANIES FEARFUL OF ENTERING THE MARKET AT ALL.
On Brazil's attractiveness for mining investments, Azevedo lists the country's neutrality as a prime factor, as it is not aligned with any group of competing nations. "We are not 100 percent China and we are not 100 percent the United States, for example. We are politically neutral." In addition, Brazil has something that he also considers extremely important, which is a stable, cost-competitive and clean energy matrix. "In addition, we have an industrial sector that serves the mining industry, which does not have to depend on imports. We have technical expertise, both for mineral research and for the execution and operation of large-scale projects.
Another major consideration," he adds, "is that, here in Brazil, we have no difficulty in accessing water resources, so necessary for mining." Also, the Brazilian financial sector is strong and fully mature. "That means the pros definitely outweigh the cons.
Azevedo recalls that the Brazil Geological Survey has recently contracted a new aerial survey program to expand knowledge of the country's geology, commenting that "This is the type of investment that the country really needs to make."
Azevedo is the CEO of Bravo Mining, which is now researching areas bearing platinum group minerals (PGMs) in the Carajás region. There was no aerial geophysics coverage of the area available at the time, meaning that the company had to do the job at its own expense. "But that turned out to be in our favour," he says, "because we ended up discovering a series of very promising opportunities within the project. Among other things, we even found a previously unsuspected copper mineralization."
Azevedo also defines as "extremely important" the funds that were created by BNDES and Finep to finance mining projects that are still in their early stages and to support initiatives that aim to expand technological knowledge and the production of strategic minerals for the energy transition and also for the industrial development of the country in general. He warns, however, that the volume of financial resources on offer under these programs is still very limited.