Brazil mineral output drops 17% in Q1

Vale’s Ponta da Madeira iron ore terminal. (Image courtesy of Vale SA.)

Brazil’s total mineral production fell 17% — 147 million tonnes — in the first three months of 2020 compared to the same period last year, the Brazilian Mining Association (Ibram) reported.

In Q1, mining companies in Brazil produced 220 million tonnes, reaching a production value of R$ 36 billion ($6.8 billion), with an emphasis on iron ore (63%) and gold (11%). Iron ore exports fell 16.5%, to 70 million tonnes.

Source: Brazilian Mining Association

“This reduction was mainly due to the heavy rains that hit the country earlier this year, declines in world growth rates and uncertainties in the financial markets,” Ibram said in a press release.

Ibram expects declines in production throughout 2020 with small resumes in production levels in the last quarter this year, and a gradual recovery in 2021.

Wilson Brumer, head of Ibram’s board of directors, told reporters that the impacts of the coronavirus would likely worsen in the second quarter.

“The first quarter wasn’t that affected, with the exception of March,” Brumer said.

“In April, yes, we’re in the eye of the hurricane. So I would say, that if the current situation continues, I think realistically we could have a fall in production.”

The industry group expects a 45% drop in national mining production in 2020, according to a study from the Federation of Industries of the State of Minas Gerais.

Vale paid the most in mineral royalties — $541 million reals ($103 million).

(With files from Reuters)