Can Mato Grosso state become a Brazilian mining powerhouse?

Bnamericas Published: Tuesday, February 07, 2023
Can Mato Grosso state become a Brazilian mining powerhouse?

Mining revenues in Brazil’s Mato Grosso state are expected to reach around 10bn reais (US$1.9bn) this year, surging from 6.8bn reais last year.

That growth will be fuelled by the Aripuanã underground polymetallic mine, owned by Brazilian firm Nexa Resources, which is scheduled to reach full production in the coming months. The operation produces zinc, copper, lead and silver.

But in addition to this mine, the state has great potential to continue increasing mining activity in the coming years if various logistical bottlenecks can be resolved and if its largely unexplored territory can be geologically charted.

Juliano Jorge Boraczynski (pictured, right), president of state-run mining exploration company Metamat, and João Antônio Paes de Barros (pictured, left), a geologist at Metamat, speak with BNamericas about the opportunities and challenges for the mining industry in the state.

BNamericas: How much revenue is the mining sector in Mato Grosso state estimated to produce in 2023?

Boraczynski: We're likely to see revenues from the mining sector practically double here in Mato Grosso state in the coming years. This year, it's possible that revenues of around 10bn reais can be reached.

BNamericas: What explains this growth?

Boraczynski: We will see production expanding at the Nexa mine in Aripuanã, which has production of zinc, copper, lead and gold. This operation at the Nexa mine explains this growth.

BNamericas: In addition to this project, are there any other important projects underway in the state that could help Mato Grosso increase revenues in the coming years?

Boraczynski: Rio Tinto has spent years exploring the region of the city of Alta Floresta, where there's potential for a large copper deposit. It could be that the next big project in the state will come out of that.

BNamericas: What are the main logistical challenges to increasing mining activity in the state?

Boraczynski: Currently, our main logistics corridor in the state is the BR-163 highway, which connects us to Pará state. This highway is in the process of having its concession contract resumed by the state government so that investments can be made in improvements. This highway has a bidirectional section and when one road is blocked, it ends up delaying everyone's journeys.

There is also a possibility that the railroad in the state could be extended and that would be crucial for the flow of mining production from the state.

BNamericas: What is the long-term potential of the state's mining sector?

Boraczynski: Metamat exists to foster exploration activity in the mining sector. Currently, only 0.5% of the state's territory is known in geological terms. I would say that Mato Grosso is still a paradise to be explored in terms of gold, copper and limestone, among other minerals.

BNamericas: Which companies are leading mining exploration in Mato Grosso?

Barros: Exploration is an activity that involves high risk and we still see few Brazilian companies willing to assume those risks.

Most of the time, it's junior companies with shares listed on the Canadian or Australian stock exchanges that decide to take on these risks.

BNamericas: Last year, Mato Grosso was ranked sixth in Brazil in terms of mining production. Is it possible to move up the ranking?

Barros: Pará, Minas Gerais and Bahia states have very rich subsoil. It's difficult to reach the levels of these states. But we will only be able to really climb the ranking if we invest more in exploration.

We already have important mining activity in gold, copper and zinc, and there's potential for the state to develop the production of tin, titanium and nickel. But, as our president mentioned, in addition to research activity, we also need to improve the state's logistics.

BNamericas: We've seen the current federal government stepping up the fight against illegal gold mining in the north of the country. Does this have any impact on mining activity in Mato Grosso?

Barros: We don't have significant areas of illegal mining in the state and only a very small part of the state's territory has indigenous reserves. This could lead to more companies wanting to operate here.

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