Primary Industry

Brazil’s primary industry supplies raw materials to practically all production sectors, principally mining, iron and steel works, metallurgy and cement industries.

Regarding the steel works industry, Brazil’s production of raw steel in 2011 reached 35.3 million tons, recording an increase of approximately 7.2% in comparison with 2010, presenting a variation similar to the global average, which posted an increase of approximately 7.4% in the same comparison.

Concerning consumption, according to estimates from the Brazil Steel Institute (IABr), Brazil’s estimated apparent consumption in 2011 was 25 million tons, approximately 4% lower than in 2010. Related to the trade balance, Brazilian imports of raw steel presented a drop of approximately 37% in comparison to 2010, while exports increased approximately 26%.

Operations approved by the BNDES for the primary industry in 2011 encompassed the following projects: expansion of production capacity of long and flat steel; current investments and those for modernization in steel mills; implementation of cement production units; current investments and those for modernization in copper and zinc production units; and technological innovation via Funtec.

Total disbursements for the primary industry in 2011 reached R$ 5.52 billion, some 55.5% higher than in 2010. In sectorial distribution, there was a significant change in comparison to 2010, with mining going from 31.7% to 54.1%; steel works from 52.9% to 32.6%; and cement from 15.4% to 13.4%, in absolute values. While the steel and cement sectors remained at similar levels to 2010, mining practically represented the entire increase in disbursements for the segment.

It is worth highlighting the Anglo Ferrous Minas-Rio project, which required R$ 1.54 billion in resources from the BNDES in 2011 for the construction of a mining system in the state of Minas Gerais, with an annual production capacity of 26.6 million tons of iron ore, including a mineral pipeline to the Port of Açu, in Rio de Janeiro.

Social disbursements associated with the project portfolio – Company Social Investment line (ISE) – totaled R$ 17.8 million, and the main investments were in educational, citizenship, cultural, health and sanitation projects, mostly in the states of Goiás, Minas Gerais and Rio de Janeiro.

Within the environmental context, we can highlight support provided to Usiminas in the amount of R$ 74 million referring to the project for environmental recovery of an area in Itaguaí (state of Rio de Janeiro), where a new port terminal, owned by the Usiminas Group, will be installed.

In the mining segment, the global demand for iron ore in 2011 maintained its growth trend registered over the last few years. Brazil accounted for 325 million tons, representing approximately 29% of the global total.