Spotlight: Brazilian miners' 2024 capex, business plans

Major miners with operations in Brazil provided updates on the business outlook and capex plans. 

Iron ore, but also energy transition minerals like copper and nickel, remain the key focus. Promising signals are coming from its top iron ore market of China, while increasing electrification is fueling the interest in investments in copper and nickel operations. 

"China announced a growth projection of 5% this year, which tends to support iron ore price levels and encourage projects in the segment," Pedro Galdi, mining and metals equity analyst at Mirae Asset Wealth Management, told BNamericas.

Meanwhile, “in recent months, we have seen the start of production of many projects in the mining area to meet the high demand for the production of batteries, electric vehicles. This effect has impacted the price of some commodities, [trending] downwards,” Jomar Napoleão, a partner focused on the EV area at Brazilian consultancy Carcon Automotive, told BNamericas.

“But the demand for electric vehicles is growing and the medium and long-term appeal of these materials continues and the projects still retain great appeal.”

VALE

Global iron ore powerhouse Vale will invest US$6.5bn this year, compared with around US$6bn in 2023. Of the total, US$2.5-3bn will be allocated to energy transition metals.

Due to the energy transition and rising electric vehicle demand, copper and nickel demand will rise 16% and 19% through 2030, while EV sales are expected to increase 24% per year, Vale said in a presentation for investors.

CSN 

Iron ore miner CSN Mineração, a unit of Brazilian steelmaker CSN, is expecting a positive 2024 thanks to the projected strong performance of China, which is the main buyer of its output.

"We have a constructive view on China. The government recently announced a 5% expansion target for the economy for this year, a plan to provide greater openness to foreign investment, and another positive point is the model for social housing that China wants to adopt, which enables greater demand for steel and iron ore," CFO, Pedro Oliva, said during a recent conference call to discuss 2023 results.

Oliva also said the company is maintaining plans to invest 15.3bn reais in operations and projects between 2024 and 2028. Capex was 1.48bn reais (US$297mn) last year, up 22.7%. 

The company’s main mining project is Itabirito P15 (Casa de Pedra) in Minas Gerais state, where operations are planned to start in the first quarter of 2027 with capacity of 16.5Mt/y. 

"The P15 project is transformative for us. It will lead our operation to a level of 67% iron content, compared to something close to 60% today. With this, we will see an increase in the price of products sold," said Oliva.

ERO COPPER

Canada's Ero Copper, which seeks to start production at its Boa Esperança (Tucumã) iron oxide-copper-gold project in Brazil’s Pará state during the second half, announced capex of US$299-349mn for the year, 

"The company's capital expenditure guidance includes an estimated US$30mn to US$40mn allocated to consolidated exploration programs. This allocation includes approximately US$20mn designated for drilling activities at the Caraíba operations, including expenditures related to the Curaçá Valley nickel exploration program. Additionally, the company has budgeted approximately US$6mn for the first phase of work at the Furnas project," the firm said in a statement.

Ero controls copper miner Mineração Caraíba, owner of the Caraíba assets that comprise the Pilar and Vermelhos underground mines and the Surubim open pit mine, in Bahia state. It also owns NX Gold, the controller of the Xavantina gold and silver mine in Mato Grosso state.

NEXA

Nexa Resources, a Brazilian polymetallic miner that also has operations in Peru and is part of industrial conglomerate Votorantim, unveiled a US$311mn capex plan for this year. 

Of the total, US$261mn will be used for sustaining investments, with mining accounting for US$200mn, including US$39mn at the Aripuanã project, and US$61mn for smelting.

AURA 

Canadian gold miner Aura Minerals, with projects and operations in Brazil, announced a capex plan of up to US$219mn, compared to US$108mn in 2023.

The company attributed the increase to the addition of the Borborema project to its pipeline.

The Borborema greenfield project in Rio Grande do Norte state was previously owned by Australia's Big River Gold and acquired by Aura in 2022.