Gold Mining in Brazil
Brazil is ranked as the world's fourth largest gold producer, has a stable geo-political climate, a development friendly regime, and access to low cost production.
In the late 1970s, Brazil's military government conducted a sweeping aerial survey of the region which helped to confirm the presence of the Guiana Shield, a massive two billion year old geological formation (discussed by Discovery as the Brazilian Shield in its N.I. 43-101 Technical Report) which is historically known to contain prolific gold resources. The Amazonian Guiana Shield is the other half of Africa's Guiana Shield, which is responsible for the gold and platinum wealth of South Africa and other countries in sub-Saharan Africa. During the Jurassic period, the Guiana Shield was split into two -- South America and Africa -- due to plate tectonic movement.
Today the Amazonian Guiana Shield covers over 100 million acres of jungle and savannah and is the site of an ongoing gold rush. An estimated 50 million ounces of gold have been recovered from the Amazonian Guiana Shield in comparison to the 12 million ounces of gold removed during the first five years of the California Gold Rush. It is currently estimated that there are still over 500,000 explorers and miners, including several publicly-traded gold mining companies, exploring and developing the Amazon Guiana Shield.
Jim O'Neill, global economist at Goldman Sachs, suggests the economic potential of Brazil, Russia, India, and China is such that they may become among the four most dominant economies by the year 2050. Brazilian exports are surging it is also energy independent. Brazil also no longer needs to rely on foreign sources to meet the country's energy needs due to a 30-year alternative energy campaign that has implemented the majority use of hydroelectric power to generate electricity and outfitted automobile filling stations with ethanol-based fuels. In addition, a 1995 foreign investment allows offshore companies to hold a 100% ownership in mineral properties, and new regulations regarding environmental and operating processes have successfully attracted new investment and diversified Brazil's mining industry.
According to the latest available figures from the Departamento Nacional de Produção Mineral (DNPM), gold production in 2006 was 40 tonnes, an increase of 4.5% compared to 2005. The production of the mines (companies and cooperatives) corresponded to 87.0% of the national production, an increase of 16.4% over the previous year. AngloGold Ashanti Mineração Ltda. led gold producers with 22.2% (7,7 t) of the national production, followed by Mineração Serra Grande S/A, a subsidiary of multinationals AngloGold Ashanti and Kinross Gold Corp. 16.9% (6,0 t) and Rio Paracatu Mineração S/A, of Group Kinross Gold Corp. 15.4% (5.4 t).
The DNPM also reported Yamana Gold Inc holds the exploitation rights on the mines of Jacobina, Morro do Vento and Canavieiras, located in the State of Bahia. Operating through its subsidiary Jacobina Mineração e Comércio Ltda., it resumed extraction and processing in 2005 at the Jacobina mine, producing 2.5 tonnes in 2006, 6.3% of the Brazilian production.
The production of gold extracted by artisans, estimated on the collection of the Tax on Financial Operations - IOF, of approximately 5.2 tonnes in 2006, featured for the second consecutive year a reduction of 38.0% as compared to 2005. It is estimated that the distribution of artisan-extraction activities in the main gold-producing states was: Pará (45.7%), Mato Grosso (20.3%), Amapá (15.5%), Rondônia (8.0%) and others (10.5%).
With over 2,500 currently known gold occurrences, Brazilian gold exploration, development, and production is expected to continue increasing significantly in the foreseeable future.