South and Central America Dominate Mining Industry With an Iron Fist

NEW YORK (GBI Research), 24 May 2012 - Rising demand for iron from Asia and Europe is expected to fuel future growth in the South and Central America mining industry, compounding its status as a leading global producer and consumer of iron ore, according to natural resources expert GBI Research.

The new report^* explores how South America’s impressive transport infrastructure enables the iron ore industry to function smoothly, allowing huge amounts of the commodity to be exported while moving resources to be used domestically.

During 2011, the region exported an estimated 356.3 MMt of its total estimated production of 466 MMt, shipping out 76% of all the iron ore mined that year.

Infrastructure such as rail, road and port facilities, particularly in the two major export hubs of Brazil and Venezuela, encourage growth in the region’s iron ore export sector.

Brazil is the largest exporter of iron ore in the region, with exports estimated at 342 MMt in 2011, accounting for around 80% of the country’s total annual production. The scale and organization of Brazil’s infrastructure for facilitating iron exports is considerable, with Vale S.A., the largest iron ore producer in Brazil, operating 10,179km of rail track alone over four separate railroads.

Port facilities on the Orinoco River in Palua, Venezuela, stretch a length of 276.6m, with a ship-loading capacity of 1,100 tons per hour (tph) for Hot Briquetted Iron (HBI).

Such well-structured infrastructure facilities clearly constitute a driving factor for the region’s iron ore exports, and South and Central America has both the facilities to allow for greater iron ore exports in the future, and the appetite to utilize more domestically. The region’s predicted iron ore consumption increase over coming years can be attributed to the huge demand expected from Brazilian steel manufacturing companies such as Usiminas Group, Gerdau Group and ArcelorMittal in the forecast period. High overall demand in the future years therefore promises rosy years ahead for the iron ore mining industry.

Iron ore production in South and Central America stood at an estimated 466 million metric tons (MMt) in 2011, and is expected to grow at a compound annual growth rate (CAGR) of 5.3% to reach 904 MMt by 2020. Meanwhile, South and Central America’s iron ore consumption stood at an estimated 147.3 MMt in 2011, and is estimated to increase at a CAGR of around 6.4% to reach 264 MMt by 2020.

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^*Iron Ore Mining Market in South and Central America to 2020 - Infrastructure and High Quality Reserves Provide Incentives for Regional Exports

This report provides key information and analysis of South and Central America’s iron ore mining industry, consisting of Brazil, Venezuela and Mexico. It covers the industry’s drivers and restraints, production, reserves, and consumption, and also provides details of each country’s ore trade (imports and exports).

This report is built using data and information sourced from proprietary databases, primary and secondary research, and uses in-house analysis from GBI Research’s team of industry experts.

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