Brazil pushes $57 billion mining sector plans despite the slump

Brazil, the world's seventh-largest mining country, accounting for 5.62 per cent of total world output, said it will go ahead with its five-year $57 billion investment plan in mineral prospecting despite a global economic slowdown and a fall in mineral prices.

Brazilian industry leaders, however, said Brazilian miners, especially the small ones, are taking a cautious approach in new mining as in present credit crunch has engulfed almost all of them.

The number of small prospecting companies in Tapajos, a mineral rich basin in Brazil's Amazon region, showed a sharp decline to 5 from a high of 20, last July.

As 88 per cent of Brazil's mining output is controlled by local mining companies, the big miners are not hurt with the current crisis as most of them are cash rich due to high mineral prices seen in the past several months.

Brazilian Mining Institute, which is more commonly known as IBRAM, had projected $57 billion investments in the mining sector over a period of five years, will now be delayed by a minimum of 2 years.

The Brazilian miners feel that although there is a fall in production and investment, it is only temporarily as the global need for minerals is too strong for the market to remain feeble for long. They expect metal prices to surge when demand eventually recovers.