Ministry of Economic Development and Trade (Ontario) Brazilian Commercial Trade Office In-Market Coordinator - Mr. Marcos José de Almeida Duarte THE BRAZILIAN MINING SECTOR THUNDER BAY – TIMMINS – SUDBURY – NORTH BAY

Sector Overview Production Data Perspectives & Investments Products in Demand How We Can Help

BRAZILIAN OVERVIEW  Area: 8.5 million km² - 5th largest country (area) in the world.  Inhabitants: million (est. 2010)  Brazilian is divided into five regions (26 states and the federal district)  Key Cities: São Paulo, Rio de Janeiro, Salvador, Belo Horizonte, Porto Alegre, Fortaleza, Recife and Brasília.  Official language: Portuguese  Currency: Real (R$)  Exchange rate: 1 CAD = 1.71 R$ (November 11th, 2010)  Chief of State: President Luiz Inácio Lula da Silva (until Dec. 2010) Source: IBGE

BRAZILIAN MINING SECTOR OVERVIEW  Brazil is among the world’s largest mining producers, along with Australia, Chile, China, the USA, Canada, Russia and South Africa.  In percentages of the world’s production, this represents:  # 1 Niobium producer, with 95%  # 2 Iron Ore producer, responsible for 17%;  # 2 Manganese producer, with 21%;  # 3 Bauxite, with 12,4%  # 3 Graphite producer, with 7,12%. Source: IBRAM/DNPM 2009 Iron-ore Production 394 Million Tons 327 Million Tons 257 Million Tons 234 Million Tons

 Mining companies: 73% are small-sized, 22.2% are medium-sized and 4.8% are large companies.  There are over 2,600 mines in Brazil.  Over 98% of these mines operate open pit.  The states of Minas Gerais, Pará and Goiás make up over 80% of the mines. Source: IBRAM/DNPM

Production: US$ 30 billion Increase of 11% over 2007 Iron ore production increased 6% MINING PRODUCTION DATA Production: US$ 25 billion Decrease of 17% over 2008 Mining Investments: US$ 5.2 billion Decrease of 10.2% Iron 327Mt, Bauxite/Alumina 36.9Mt, Copper 217Kt, Manganese 1.7Mt, and Koalin 2Mt Although the Brazilian mining sector was affected by the 2008/09 international economic crisis, the mining companies have been increasing investment in order to recover Bauxilie/Alumina 34 Mt, Manganese 2.4Mt, Copper 222Kt and Kaolin 2.6Mt Mining industry/mineral transformation: US$ 89.4 billion. It represented a 5.25% share of the brazilian GDP Source: MME/IBRAM/DNPM

INTERNATIONAL TRADE  The commercial balance increased over seven times from 2001 to  Production exported: US$ 22.8 billion; the positive balance reached US$ 13.1 billion  Main exported substances: iron ore (82,6%), ornamental stones (6,5%), copper (6,2%), kaolin (2,4%), bauxite (1,9%) and others (1,35%) * In Billion US Dollars * Source: AliceWeb (MDIC)/IBRAM

PERSPECTIVES & INVESTMENTS  It is estimated that between 2009 and 2013 Brazilian corporate investment in the mining sector will total US$ 62 billion; an average of US$ 12.4 billion per year.  Investments are planned to increase iron ore, bauxite, aluminum, copper, and gold extraction.  Production of iron ore and nickel are expected to rise sharply until  The amount of investments in the state of Minas Gerais exceeded 50% of what was invested the previous year. Source: MME/IBRAM/Valor/PriceWaterHouseCoopers

PERSPECTIVES & INVESTMENTS  Due to the worldwide importance of the Lithium, Brazil estimates higher investment to increase the extraction of Lithium (1,3% of the world’s reserve). Federal Investment: Plano Mineral 2030 intends to double mineral production in 20 years, reaching the amount of a billion tons of iron ore (150% above the volume that is now being produced) Source: MME/IBRAM/Valor/PriceWaterHouseCoopers

PLANNED INVESTMENT BY MAIN COMPANIES  Vale, the second largest mining company in the world plans on: - Investing US$12.9 billion in 2010; - Investing US$24 billion in 2011; - Duplicating its production in 5 years; - Working on 18 different projects between ; - All investments aim at improving equipment, rail roads, loading/transportantion and water capturing. *Vale looks at developing contact with new international supliers. Source: Vale/IBRAM/Valor

PLANNED INVESTMENT BY MAIN COMPANIES  CSN(Companhia Siderurgica Nacional): - Increase production to 40Mt/year (Mine Casa de Pedra)  SAMARCO - Duplication of pellet production  MMX - Increase mining production capacity to 46Mt per year  ALUNORTE - Grow production capacity from 4,4Mt to 6,3Mt of Aluminum per year Source: Valor/Vale/MMX/Alunorte/IBRAM

PRODUCTS ON DEMAND  Earth-movers  Belt Conveyors  Crushers/Grinders  Laboratory instruments  Drill pieces  Carriers/loaders  Management and controlling Software  Security devices Source: IBRAM/Vale

MAIN MINING COMPANIES

CANADIAN MINING COMPANIES IN BRAZIL

PLANNED TRADE SHOWS ( )  EXPOSIBRAM (2011) – Belo Horizonte *The most important  M&T Expo (2012) - International Trade Show of Construction and Mining Equipment  Sul Metal e Mineração (2012)  CBMina (2012) – Congress of Open Pit and Underground Mining  Equipo Mining (2012)

How to do Business in Brazil

HOW WE CAN HELP Market Analysis Partner Search Contacts with local companies Preparation of an agenda of meetings Follow-up contacts

REFERENCES  IBRAM (Brazilian Mining Institute)  DNPM (National Department of Mineral Production)  MME (Ministry of Mines and Energy)  Valor (Business Publication)  IPEA (Brazilian Institute of Applicable Economic Research)  MDIC (Ministry of Development Industry and Trade)  AliceWeb  PriceWaterHouseCoopers

THANK YOU Ontario Ministry of Economic Development and Trade Brazilian Commercial Trade Office Porto Alegre / São Paulo / Rio de Janeiro Phone: +55 (51) or or