PEST of brazil mine sector

Having only 30% of the territory geologically mapped, a vibrant and modern mining industry, a developing economy and an open and stable legislation, the future of mining in Brazil cannot be anything but bright. 3. 2. Political Factors Mining sector in Brazil is ruled by the Mining Code (1967). The Ministry of Mines and Energy is the entity in charge of managing the mineral resources available in Brazil and responsible for supervising the mineral activity and enforcing the law.

The Ministry of Mines and Energy (MME) is the organ which gives mining inceptions, and In order to receive an approval, the overseas company has to be registered in Brazil, prove that has enough funds to develop the mining project, and to have a specific environmental license approved. Mining concessions have no limit of time and are valid until the end of the natural resources. Dilemma Rousseau, the current president of Brazil, was well received by the mining community.

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Professor Jiao Marina of the Gag©NCAA Para o Discontentment Techno¶coco dad Mindјstrip Mineral Brasilia (ADMIT) said, “When Dilemma was elected president, intuitions for the mining sector were expected to improve. ” Recently, Dilemma vetoed the raise over mineral royalties. More than 500 transnational corporations established operations in the country between 1990 and 2009, due to Brazier’s favorable policies on appropriation, Joint ventures and mergers.

But the mining market is still controlled by two large Brazilian companies: Vale and Petrol’s. Brazier’s taxation policy in the mining industry varies according to federal, state and municipal authorities. Usually taxation varies for mining companies depending on he region of Brazil they mine in, and the mineral the company mine. All mining companies in Brazil are subject to pay taxes between 10% and 15%, as well as the royalties ? also known as the Compensation for Exploiting Mineral Resources (CAFE).

Since the end of 2011, a new mining law is being discussed. If it’s approved, the DAMN would become an independent regulatory agency; exploration licenses would be granted through a bidding system; and the existent mining agreements would be reviewed. 3. 3. Economical Factors Usually Brazil is very open to foreign investment. Brazil is the Latin American country that receives more foreign direct investments, and the United States is the number one foreign investor in Brazil.

Since domestic saving is not sufficient to PEST of Brazil mine sector By glimmered maintain a high long-term growth rate, Brazil must attract tottering direct investments The Brazilian mining industry is an extraordinary opportunity for international investors and suppliers, because of the promising forecasts of growth rates for the Brazilian mining sector. Nowadays, the Brazilian economy is rising. Blessed with a rich variety of natural sources, Brazil has become the most powerful country among the South American countries in economic terms.

With a growing agricultural, mining, manufacturing and service sector, Brazilian economy has also acquired a strong position in global economy. In 2011 the total labor force employed in mining reached 175 thousand workers. “Studies by the Ministry of Mines and Energy’s National Department of Geology, Mining and Mineral Processing show that the multiplier effect of Jobs is 1:13 in the mining sector, for each mining Job, 13 others are created (direct employment) along the production chain. Therefore, it can be assumed that the mineral sector in 2011 employs about 2. Million workers (directly), not considering the vacancies generated during the research, prospecting and planning stages, and the workforce employed in the mines” (The Strength of Brazilian Mining, 2012, p 7). 3. 4. Social Factors Brazil is facing a rapid urban growth and this growth aids economic development but also result in problems related to security, environment, politics and social issues. Specially for big cities. Some laws impose regulatory restrictions to the health and safety of workers, the feet of proximal local residents, and the support of local communities.

Mining activities in Brazil not only generate important streams of revenue for federal governments but also, directly and indirectly, contribute to the development of local economies. 3. 5. Technological Factors Brazil is the leader in science and technology among South American countries and also one of the global leaders in bio-fuels researches and exploration of deep- water oil. The Brazilian government tries to develop and support innovation in business. One of the examples of this effort is the Innovation Law.

The objective is to provide incentives to increase innovative activities; facilitate scientific and technological research by private companies and encourage collaboration between public and private sector. The mining industry has been benefited with the creation of the Centre De Technological Mineral (ESTEEM), which is a federally funded research and development centre under the Ministry of Science and Technology. Also, sixteen universities now offer courses in geology, geochemistry and egotistic and seven offer degrees in mining engineering.