Metallurgical industry in Brazil

In Brazil, confirmed reserves of iron ore are estimated at 11 billion tons. (6.4% of the world). The largest deposits are explored in the states of Minas Gerais (the average iron content is 30%, but ore with an iron content of more than 60% is mined) and the Parad (Karadzas deposit – iron content more than 60%). A large iron ore basin (Morro do Urukum) is also located in the state of Mato Grosso.

The Brazilian Constitution of 1891 approved the provision that the owner of the land is also the owner of the natural resources contained in it. The permission for their development by foreign companies was also determined. In 1981, Belgium, France, the United Kingdom and the US bought up a lot of iron ore deposits for almost nothing. The British company Itabira Iron Ore Co., which bought the deposits of iron ore province Itabira in the state of Minas Gerais and a railway leading from the fields to the port of Vitoria, was founded. The company was bought out by American businessman Percival Farquhar in 1919. Iron ore was first exported from Brazil to the United States in the 1930s. However, the regular export of iron ore began to acquire only by the end of the 30-ies. In 1930, Brazilian President Hetulio Vargas advocated the nationalization of the country’s natural resources. Since 1940, Itabira Mineracao has begun a stable supply of iron ore to the United States. However, in 1942 it was nationalized and renamed the CVRD (Compahnia Vale do Rio Doce). By 1949, this company accounted for about 80% of all exports of iron ore from Brazil. In 1952, the company’s operations were put under direct control of the government of Brazil.

In the 40-ies. Most of Brazil’s modern mining companies were founded. The growth of exports required the increase of the port’s capacity in Vitoria – two ore piers were built by the company CVRD. In 1962, the company entered into the first long-term contracts for the supply of iron ore. By this time, it already occupies the 6th place in the list of the largest exporters of iron ore. In 1966, CVRD builds its own ore port of Tubarao. In 1969, CVRD is building the first factory for the production of metallized pellets in the port of Tubarao. Throughout the 70’s. The company organizes a geological unit and conducts a seven-year search for new deposits of iron ore (in conjunction with USGS). At the same time, in the port of Tubarao, together with Spanish, Japanese, Italian companies, factories for the production of metallized pellets are being built (the total capacity has grown to 22 million tons of pellets per year). In 1975, CVRD became the largest company in the world in terms of exports of iron ore (market share – 16%). In 1976, the Itabira-Vitoria railway was duplicated, in 1978 the construction of a railway to the Karajas deposit in the State of Para began, and in 1985, its industrial development began.
At the moment, CVRD is the world’s largest mining company.

The company develops not only iron ore deposits, but is also a major producer and exporter of manganese, gold and many other kinds of mineral raw materials, the profit margins of this concern reach $ 900 million per year. In 1997, the company CVRD was privatized. Terms of the auction were very strict: the total number of shares owned by producers and consumers of iron ore should not exceed 45% of voting shares, no buyer could purchase more than 45% of voting shares. In addition, the number of shares owned by the steelmaking company producing more than 8 million tons. A year or a trading company-operator with a turnover of more than 30 million tons. Per year can not exceed 10%. The winner was the Valepar consortium led by the largest steel producer in Brazil – CSN Corporation. For $ 3.1 billion, the consortium acquired a 25% stake in CVRD (34% of the voting package). The remaining shares were acquired by a group of pension funds (39%), Eletron (17%), Bndespar (9%), American Nation’s Bank and Investvale. The government reserved a “golden share” guaranteeing the right of veto.

Territorially, the company’s activities in the field of iron ore are divided into two unrelated systems – the Northern and Southern. The northern system includes the Karajas deposit in the State of Para, a single-track railway (900 km.) From the field to the Ponta da Madeira seaport and the pellet plant (see map). The Karajas deposit is unique in terms of iron ore reserves with a high iron content. In the first year of operation (1985), production was 15 million tons, in the second year – 25 million tons, in the third year – 35 million tons. The northern system operates at full capacity (about 50 million tons per year). In the near future, the production of iron ore will not be possible to increase due to the full load of the railway line and the seaport. The company plans to modernize the railway, which will increase its capacity by 5 million tons. in year

The southern system is based on the iron ore province of Itabira in the state of Minas Gerais. It includes several mines in the area of ​​the eponymous city (on the map there are no Timbepaba mines – 10 million tons of iron ore per year, 5 million tons of iron ore, 5.8 million tons of Kapanema, 3 million tons of Bau- ., And Fazendao – 1 million tons), an enrichment plant with a capacity of 20 million tons. Per year and the E.V.F.M. From mines to the company’s own seaport of Tubarao (throughput of 80 million tons). In the port of Tubarao there are 7 plants for the production of metallized pellets with a total capacity of 26 million tons. in year. (2 plants belong to CVRD, the rest are in joint ownership with the companies of Japan, Spain, Italy and South Korea). The southern system produces about 50 million tons. Iron ore per year. In 1985, it accounted for about 70 million tons, but due to the beginning of the Karajas deposit development and the depletion of the fields, the productivity of the mines decreased. CWRD plans to increase the production of iron ore in the southern fields to 61 million tons. By the year 2003. Annually, the company CVRD produces about 100 million tons. Commodity iron ore, about 70% of which is exported (Japan – 18%, Germany and South Korea – 9%, China – 7%, France, Italy, Spain and the United Kingdom and the United States – 3%, other European countries – about 6%, as well as Argentina, Taiwan, the Philippines, Bahrain, etc.).

The second largest producer of iron ores in Brazil (and the fifth in the world) is MBR (Mineracao Brasileiras Reunidas). In 1999, this company produced about 26 million tons. Iron ore. The company was founded in 1965 on the basis of deposits of the state of Minas Gerais (mines Aguas Claras and Mutuka). At the moment, the company owns six iron ore mines to the southeast of the city of Belo Horizonte. This area is the main production area for most iron ore mining companies. MBR exports about 85% of the extracted iron ore through its own port of Guaib near Rio de Janeiro. The capacity of the seaport is about 25 million tons. in year. MBR owns a 33% stake in the MRS railway company, the same shareholding belongs to CSN, which also produces iron ore in the region (about 7 million tonnes per year), while Ferteco and Usiminas extract companies hold 21% of the shares. The company MBR is owned by the international trading company operator Caemi Mineracao e Metalurgia S / A (85% stake), American steelmaking company Bethehem Steel Co. (5%), and several steelmaking companies in Japan (10%). The company compensated for the losses associated with the depletion of the Aguas-Claras and Mutuk deposits by the introduction of the Kapao-Shavier, Tamandua and Capo do Mato mines in 1997, which increased its production capacity to 32 million tonnes. in year.

The company Ferteco produced in 2000 about 20 million tons. Iron ore, in 1999 finished the construction of Seepeti sea port near Rio de Janeiro with a capacity of 25 million tons. in year. Prior to this, Ferteco used the CVRD railway to the port of Tubarao, which increased the transportation costs of the company. Now the company ships about 10 million tons via the port of Tubarao. A year, mainly from the mine factory, which is connected to the road CVRD. The second mine of the company uses a new port. The company exports about 12 million tons. (Mainly to Germany, to the Thyssen Krupp Stahl steel mill – 6.7 million tons).

Samarco produces about 11 million tonnes annually. Of commodity iron ore. The company owns two pellet production plants (the total capacity is 12 million tons per year) in the port of Ponta do Ubu and the Ermano mine, connected by a pipeline. In addition, the company owns a concentrator with a capacity of 9.5 million tons. in year. 49% of the company’s shares belong to the Australian concern BHP, 51% – to Samitry, all products of the company are exported.
The company Samitry produces about 12 million tons. Iron ore per year, about 90% of the output is exported (mainly to Belgium).
The CSN steelmaking company mines ore at its own mine, Casa to Pedro (about 7 million tons per year) for domestic consumption only.
In Brazil, Rio Tinto consortium also produces iron ore. At the only mine in Corumb (Mato Grosso), about 1.7 million tons are produced. Iron ore per year.

A feature of the development of the iron-ore industry in Brazil is the huge external investment from developed countries. For example, the cost of developing the Karajas deposit was $ 4.6 billion. CVRD’s own funds accounted for 41% of this amount, the rest of the money was issued on credit. An important role was played by the system of long-term contracts, the company received letters of interest from steelmaking companies for ore supplies totaling 15 million tons. in year. In 1998, all Brazilian companies accounted for 33.1% of world exports of iron ore. The very territorial organization of the industry is very similar to a typically colonial structure with a network of roads leading from mineral deposits to seaports, from where they are exported. The share of the country’s revenues from the export of iron ore decreased from 7.7% to 5.5% in 1995, compared to 1980, but still continues to be quite high.

True, over the past two years, steel production in Brazil has grown from 26.5 million tons. In 1998 to 45.6 million tons. In 2000 (for the period from 1985 to 1998, steel production in Brazil grew by only 6.8 million tonnes). If such growth rates in the steelmaking industry continue, then Brazil may turn into a major steel exporter, iron ore will become the raw material of domestic consumption. Perhaps a slight decrease in the share of Brazil in the world market of iron ore.