Brazil
Analysis

Spotlight: The Brazilian mining projects to be offered under PPI concessions

Bnamericas Published: Wednesday, February 26, 2020

Australian firm Perth Resources Minerals this month assumes control of the first mining asset auctioned off under the Brazilian government's PPI concessions and privatizations program, while more projects are set to be offered in the coming months. 

The company won the auction for the asset in October and has now completed all bureaucratic steps, giving it exploration and mining rights to the Palmeirópolis polymetallic complex in Tocantins state. 

To win the concession, the first to be tendered to the private sector under the PPI investment partnership program, Perth offered a 1.71% royalty on gross revenue and bonuses of 1.5mn reais (US$360,000) and agreed to invest 12mn reais in the project over the next three years.

The complex comprises six areas totaling 6,050ha and contains zinc, copper and lead resources in commercially viable quantities, according to a spokesperson from Brazil’s geology bureau CPRM.

A total of 250mn reais is expected to be invested in Palmeirópolis to fully develop the deposits over the next 10 years, generating about 2,500 jobs.

OTHERS AUCTIONS AHEAD

The auction won by Perth is just one of several expected to take place in the mining sector in the coming quarters.

CPRM currently owns about 330 mining processes, which are divided into 30 blocks. Of these four more projects have already been included in the PPI program to be offered to private sector players, including Carvão de Candiota (coal) in Rio Grande do Sul state, Fosfato de Miriri (phosphates) in Pernambuco and Paraiba states, Cobre de Bom de Jardim (copper) in Goiás state and Rio Capim (kaolin) in Para state.

All are likely to be offered to bidders via auctions sometime this year.

The Brazilian government intends to attract private sector investors to help boost the country’s mining activity. As part of these efforts, a controversial bill to allow the exploration of indigenous lands is even under consideration.

BNamericas take a look at the projects set to be offered. 

Carvão de Candiota 

The capex required to explore this coal deposit is estimated at 63.2mn reais. The timetable to explore and produce from the area will be 25 years or until mine exhaustion.  

The Candiota project consists of 11 exploration titles totaling an area of 20,353ha.

Fosfato de Miriri

This area has an estimated 115Mt of phosphates. The capex for the area is estimated at 191mn reais. 

The concession will comprise three years for implementation and research and 15 years of mining in a total area measuring 7,573ha.

Cobre de Bom de Jardim de Goiás

The site contains approximately 21.6mn pounds of copper and 1.76mn pounds of cobalt. It has a capex estimated at 63.3mn reais. 

This project will have 18 months for complementary research and 18 months for development.

Caulim do Rio Capim

This development has sets of research requirements divided into north and south blocks, with 1,000ha in 10 areas, or up to 10,000ha. 

Two types of kaolin have been found in these areas; soft kaolin (low sand content) and sandy kaolin. The north block is estimated to contain 574Mt of the mineral.

The capex estimate for the project has not been revealed.




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