Iron Rush

Brazil is one of the largest producers of iron ore in the world. The country has come a long way in developing the technology to explore, mine and concentrate its iron orebodies; today it is on the leading edge on iron ore technology. The recent demand – and prices – for iron were enormous and initiated a rush for iron ore deposits. Brazilian lower-grade itabirite deposits, once uneconomical, have become a boon for investors who want to profit from this craze.

Three main sources of iron exist in Brazil: archaean deposits, which are very poor and remain unexplored; proterozoic deposits, such as the banded iron formation of the Quadrilátero Ferrífero region; and iron of glacial origin, like the material found in Urucum and North of Minas Gerais state.

Iron exploration in Brazil started in São Paulo state in 1589, at Fazenda Ipanema. The region contained a very rich magnetite body, but with high levels of contaminants like phosphorous. In the 1800s, the Portuguese Royal Family founded the Real Fábrica de Ferro de Ipanema. Its iron was used to build canons for the war against Paraguay from 1864 to 1870.

Around 1910, exploitation began in Quadrilátero Ferrífero; it became the largest producer of iron ore in the country.

Only in the 1970s did the Brazilian mining industry start using technology to enrich iron ore. The first projects to use concentration technology were the Picarrão Mine, which used gravimetric concentration (Humphrey Spirals), the Samarco Project, which used reverse cationic flotation, and the Cauê Plant, which used wet, high-intensity magnetic separation.

Once the industry developed the capacity to concentrate iron ore, two economic factors became crucial: the costs, such as power, related to the preparation for concentration, and the costs of concentration itself. Developing lower-grade itabirite deposits was thus prohibitive, either due to their hard rock nature or to high concentration costs.

While the majority of the rich deposits in Brazil are already in the hands of larger companies like Vale or CSN, the recent market elevated prices to new levels, presenting new investment opportunities. SRK Brazil has been evaluating the economic potential of these options.

For two years, SRK Brazil and SRK UK have combined efforts to study areas within the northeast region and south of Bahia state for Bahia Mineração Ltda. (BML). With SRK Exploration Services, they are exploring iron ore areas in Rio Grande do Norte state for MHAG Serviços e Mineração S.A. In both cases, they are studying banded iron formations consisting mostly of hard, low-grade itabirite rocks.

In addition, much due diligence and certification work has been executed for various investors, with the help of SRK Denver, to pursue areas with lower-grade iron ore.

The Brazilian iron ore market is growing more important by the day and SRK Brazil has the right people and technology to help interested companies develop new and exciting projects.

Bruno Serra: bserra@srk.com.br
Antonio Carlos Girodo: girodo@srk.com.br


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