The Brazilian Mining Industry and the Economic Downgrade

Demonstration in Brasília outside of the National Congress Building.

It's no secret that Brazil is currently in the middle of one of the worst economic downturns it has faced in recent memory. The economy shrank sharply in 2015, and it doesn't seem that the trend is likely to reverse any time soon.

A paralyzing political crisis, rising inflation and interest rates and a sharp drop in prices of key commodity exports have formed a toxic cocktail for Latin America's largest economy (VOA News).

Although it wasn't listed explicitly in the source article, the long-term medical impact of the Zika Virus also factors into Brazil's overall instability.

Normally, this would be the point at which people would begin to ask what the downturn means for the Brazilian mining industry, which has historically been one of the leading contributors to the country's strong GDP. Instead, the question is being framed in terms of what the industry may have done to contribute directly to the downturn.

Considering that during 2015 the mining sector saw the failure of a major dam and the worst oil strike in twenty years, the Brazilian mining sector cannot open claim to be completely above the country's current set of woes. These two events, apart from harming the overall mining community, had an almost incalculable impact on the country as a whole--both the economy and the people. While mining leaders cannot be held accountable for all factors leading to the country's economic downturn, they are being held responsible for their share and doing what they can to make amends.

For our part, we look forward to a future in which Brazil as a whole, the mining sector included, is able to sort out its issues and come back better than ever.

Remember that we carry a full complement of big tires for all of your mining needs. If you have questions or comments, or if you would like to hear about our current deals, please feel free to contact us.

Image credit: By Agência Brasil CC BY 2.0, via Wikimedia Commons

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