Projects

Why Brazil?

Brazil’s relatively well-developed and diversified economy was one of the last to enter and then one of the first to recover from the 2008 global financial crisis. Brazil’s vast resource wealth, leadership as a global agricultural producer, industrial strength, emerging service industries and international status, are all indicative of the increasingly strong position the country will occupy in the global economy. The Brazilian economy represents more value in dollar terms than all of the other South American economies combined and Goldman Sachs predicts that the Brazilian economy will become one of the five largest in the world by 2050.

Brazil is the world’s fifth largest country by land mass and hosts the world’s sixth largest mining production; however only an estimated 30% of Brazil’s territory has been systematically explored by geological mapping.

In terms of its “mining friendly” nature Brazil is one of the best countries in world in which to invest. Since 1999, the Behre Dolbear Group Inc. has compiled an annual political risk assessment of major countries in the global mining industry. The survey concentrates on specific countries, regional issues, and notable trends. Geology and mineral potential are not considered, as the fact that exploration, development, and mining activity are occurring confirms the existence of such potential. Only factors relevant to “political risk” are considered.

Table 1: Behre Dolbear 2012 “Ranking of Countries for Mining Investment”.

Country

2012
Total
Points
2012
Change
Versus
2011
2011
Total
Points
2010
Total
Points
Russia
16
0
16
19
Bolivia
17
0
17
18
D.R. of Congo1
19
0
19
19
Kazakhstan
22
0
22
24
Papua New Guinea
22
0
22
22
South Africa
25
1
24
23
Zambia
26
2
24
23
Indonesia
27
0
27
21
China
28
(-3)
31
35
India
29
(-1)
30
29
Philippines
29
1
28
26
Argentina
30
0
30
31
Mongolia
32
(-2)
34
36
Tanzania
32
0
32
32
Namibia
33
2
31
31
Ghana
36
2
34
36
Peru
36
(-1)
37
33
Botswana
37
0
37
36
Colombia
39
0
39
39
United States
41
0
41
42
Mexico
43
(-1)
44
45
Brazil
45
0
45
42
Chile
51
0
51
49
Canada
52
0
52
56
Australia
57
0
57
61

1Democratic Republic of Congo

 

The 25 countries considered in the 2012 survey are ranked based on seven criteria:

  • the country’s economic system
  • the country’s political system
  • the degree of social issues affecting mining in the country
  • delays in receiving permits due to bureaucratic and other issues
  • the degree of corruption prevalent in the country
  • the stability of the country’s currency
  • the competitiveness of the country’s tax policy

Each criterion is rated on a qualitative scale from 1 (worst) to 10 (best) that reflects conditions that promote investment growth in the mining sector and it can be seen that Brazil is ranked 4th in the world behind Australia, Canada and Chile; interestingly one place ahead of the United States.

In terms of copper specifically, Brazil’s output ranks fourteenth globally with 230,000mt in 2010 with the Carajás being Brazil’s major copper producing region accounting for 60% of this production. Vale started producing copper in the Carajás at Sossego (close to Antas North) mid-2004 and currently has four more copper projects in development and expects the Salobo project to produce 200,000Mt/y of copper metal over a 30 year period.

The Carajás Region

Avanco’s projects are located in the Carajás Mineral Province of the Para State in northern Brazil.

 

CarajasLocation

The Carajás Mineral Province

 

The Carajás hosts some of the world’s largest iron ore mines and also contains the world’s largest known concentration of large-tonnage IOCG deposits (eg. Sossego, Salobo, Igarapé Bahia-Alemão, Cristalino, Gameleira, and 118, and is regarded as one of the most prospective areas in the world for the discovery of further copper-gold, nickel and iron ore deposits.

Although 600 kilometres from the Para State Capital of Belem, the Carajás has a main (Vale) rail connection to the Atlantic port at Sao Luis and is within driving distance (165kms) from the major industrial city and regional centre of Maraba.

Marabá has a strategic position being crossed by five major highways and also has a large logistics infrastructure with a port on the Tocantins River that is in the process of being connected to a new canal and loch system that will allow large barge traffic to the Atlantic Ocean.

Two Projects, Two Stages

Avanco Resources is developing two projects in a staged approach while also evaluating other opportunities: