Analyst sees Brazil mining sector increasing revenues this year

Brazil’s mining sector is likely to improve its performance this year with the chief risk to improved outlook being the deteriorating global economy outlook, according to an analyst.

"The 2023 trend will be for the sector to recover in terms of revenues because China is starting to reopen its economy after the zero-COVID policy. And we must remember that the mining market in Brazil is extremely linked to Chinese demand for iron ore," Pedro Galdi, mining and metals equity analyst at Mirae Asset Wealth Management, told BNamericas.

The main risk is made up of the signs of economic weakness in many countries, which would reduce steel production and demand for iron ore, said Galdi. “However, it is not that simple to assess the impact of this scenario because in the US there is the government’s infrastructure package, which points to increased steel demand," he added.

Mining sector revenue totaled 250bn reais (US$48.3bn) in 2022, down 26.3%, according to preliminary figures that Brazilian mining association Ibram shared with BNamericas.

The lion’s share, or 154bn reais, was generated by iron ore, followed by gold (23.9bn) and copper (15.2bn). 

The final 2022 figures and the capex forecast for the next five years, will be released by Ibram on February 7. 

In 2021, the sector posted revenues of 339bn reais, up 62% due to the pandemic-driven rise in commodities prices.