Mining sector reforms will prove limited in Brazil

Subject

Outlook for the mining sector.

Significance

Mining is a crucial extractive and export sector for the Brazilian economy. Brazil is also one of the global leaders in the production of some mineral commodities; iron ore is the primary mineral export, accounting for roughly two-thirds of the total last year. Implemented last year and amended last month, the new mining reform establishes changes regarding royalties and regulatory bodies in particular.

Impacts

• The mining reform updated the legal framework and will boost government revenues, but broader effects may be muted.
• A US-China ‘trade war’ may affect prices and demand for Brazil’s mining sector.
• Clear regulation on environmental issues will be vital to the sector’s development.