To go beyond geology and expand your understanding of pre-investment risks to mining in Brazil, it’s important to understand that the gravitational center of Brazilian mining is shifting northward. Increasingly, mines are developed in the Amazonian basin, the world’s most revered waterway and a flashpoint for environmentalists both in Brazil and around the world.
Some of the Bolsonaro administration’s greatest controversies have centered on the relaxing of mining restrictions in parklands, indigenous lands, and otherwise protected areas of northern Brazil. In April 2022, Brazil’s supreme court upheld the suspension of an environmental license for what would have been the largest open-pit mine in the Amazon basin. Permission to mine inside a national park was also stopped by the courts after celebrity-led protests brought the issue to global attention. Should Bolsonaro lose to Lula in the presidential elections, then some of the pro-mining decrees will likely be reversed.
With political sands shifting in Brazil, mining will likely be impacted, and investors look for Brazil mining risk intelligence so they can anticipate the challenges ahead.
One good resource to start off this due diligence would be a free report just produced by AMI: The 2022 Latin America Mining Risk Index. With the data and insights found in the Index, investors and miners in Brazil are equipped with a framework to assess the impact of political risk in their capital budgeting and remain aware of its changing dynamic. Too often, companies focus more on below-ground risks and are therefore taken by surprise when local community opposition, security problems, or political obstacles emerge, despite past and present events indicating that risks like these are ever-present and are best handled not when they suddenly emerge to derail a project or cause a PR imbroglio, but before they even present themselves.
Please click below to learn more about this unique report, the first to quantify mining risk in Latin America, and learn more about how it can help you in evaluating pre-investment risks to mining in Brazil and Latin America.