26 September 2008

Interview concerning mining in Amazonas

Below follows the interview granted to the magazine In the Mine, with a focus on mining. Interview granted on the 22nd of August of 2008.


- What is the current panorama on the field of mining in the state?

The mining sector is of great importance for the State of Amazonas. Today, we have in operation a large mine in Pitinga, which generates a large volume of jobs, economic activity and royalties to the state. This mine alone accounts for 80% of the nation’s necessities of tin, which gives Brazil the position of exporter of the metal. The same mine still provides good potential as a tantalum resource. We also have important oil and gas lines in Urucu and Silves, with the potential of finding new deposits, caused by the large state investment in this segment. We also have a great deposit of silvinita, which has the potential of, in average time, allowing Brazil to become self-sufficient in potassium. We also have great potential in the harvesting of kaolin, bauxite, gold, and niobium, amongst others. We welcome any investors interested in the state and understand that the competition in the segment is essential for sustainable development.


- What are the main projects in progress?

The current focus is the project of silvinita in Nova Olinda do Norte. We worry about the current contractual situation, which causes uncertainty and can raise the risk perceived by investors in Brazil and Amazonas.

From other angle, the arrival of the gas-line of Urucu in Manaus is also considered a priority. We have these two projects in first place due to the high degree of private interest on both. Not hindering however, in the presence of interested investors, the State to seek out other possible investments.


- How has the government, through its Secretary, contributed to stimulate the leverage of these projects and the sector, in general?

We have sought to understand the real potential of our reserves of silvinita and the necessities and risks associated. For example, we already understand the great energy necessary for the mine to work and we are searching for possible solutions. We also must address the environmental question which needs to be equated before any investments in Amazônia. Our secretary, in both cases, will aim to eliminate impediments and to find economically viable solutions which are ecologically adjusted.

Moreover, we have studied incentives to stimulate the formation of production chains which integrate mining with industry. Industries such as paper can benefit in the near presence of kaolin harvesting, there are also possibilities in the areas of civil construction and ceramics, which can integrate the strong tax incentives of the Free Zone of Manaus with the local mineral production. In fertilization, we can integrate the potassium of Nova Olinda with natural gas for the formation of a new strong local industry directed at supplying the field of agriculture.

More than everything, however, we have sought to keep a good enterprise environment in the state, in which private investment is well regarded and in which the profit is not seen as crime or sin, but instead, as merit and remuneration for the risk taken. Contracts preservation is also essential and the state has a tradition of respect for the contracts that have arisen since the first incentives granted in the Free Zone of Manaus.


- The logistics for the harvesting of minerals is almost always a crucial point. How has this been addressed?

We understand that transportation is crucial in the field of mining. Of course, in each case, it must be treated individually. For example, in the case of silvinita of Nova Olinda, the deposits are located in the proximity of the Amazon and Madeira rivers, in areas where the depth of the rivers allows large ships to navigate. In the case of using the delta of the Amazon river, we can supply the entire Brazilian coast; in the case of using the Madeira river, we can reach the city of Porto Velho and from there supply the center-west, a great purchaser of fertilizer. Each case is a different case, and we must understand the necessities of each investment to better address it.


- What are the projections of investments in mining in the state for the next years?

There is much interest in bauxite, tantalum, kaolin and gold, beyond the already pursued silvinita, tin, gas and oil. We have all the interest in making possible the investments that follow the three basic premises of investments in Amazônia: it must be socially just, economically viable and environmentally sound.


Denis Minev is the Secretary of Planning and Economic Development of the State of Amazonas.


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