Brazilian Mining Industry Growth Stymied by Government Foot Dragging

Brazilian National Congress Building

It's been nearly nine months since our last update on the projected changes to Brazil's mining codes. Unfortunately, there isn't much update to offer. How these changes would directly affect the Brazilian mining industry is still anybody's best guess, since the codes seem no closer to going into effect now than they did back in September.

The time is ripe for change, however. Cheery headlines claiming that Brazil's mines are outperforming their Australian counterparts are well enough... unless you have been keeping abreast of what's been going on with the Australian mining industry.

While Brazil's mining industry may be growing overall, that doesn't mean that individual sectors have been uninfluenced by the stymied bill. With news of mine closures and job losses coming from the iron ore sector in June and Reuters reporting that certain international mining companies have been avoiding investments in Brazil until the new mining laws are in effect, the government really cannot afford to continue dragging the situation out.

Mining is a vital part of Brazil's economy, accounting for about a third of exports. The saga over this law comes when the sector is already out of favor due to concerns of a slowdown in China. Industry group IBRAM estimated last year Brazil had missed out on 20 billion reais ($8.89 billion) of investment due to the uncertainty surrounding the code. (Reuters)

Talk of corruption and scandal in the Brazilian government really is news to no one at this point, but it's sad to see an ineffective government negatively influencing the livelihood of South American miners. It's our hope that the Brazilian government pulls itself together soon and that new mining bills are passed quickly.

Remember that we carry a full supply of OTR tires for all of your mining needs. We routinely ship to numerous mines throughout Brazil. Please feel free to contact us for the best deals.

Image credit: "Brasilia Congresso Nacional 05 2007 221" by Mario Roberto Duran Ortiz - Own work. Licensed under Public Domain via Wikimedia Commons

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