PwC: Brazil could soon emerge as a key global supplier of strategic minerals

Brazil is well-positioned to benefit from the current unstable international scenario, potentially strengthening its role as a reliable supplier of strategic minerals, according to a report from PwC on the current state of the global mining industry.

The study, however, also highlights critical hurdles the national mining sector must clear, including reinforcing its social license to operate and significantly increasing investment in technology and innovation. If all goes well, Brazil could win big on being a reliable supplier of high-demand minerals

Despite the continued high demand for mined products, 2024 was a challenging year for the industry. Revenue and EBITDA were down 3% and 10%, respectively, for the top 40 global mining companies, though gold mining was a major exception.

Costs have been rising for mining companies, despite high demand. Mining has long been the backbone of the global economy, providing essential resources for everything from building materials for skyscrapers to tiny components in electronic devices. The green transition has also been dramatically increasing the demand for minerals used in batteries, like lithium and cobalt.

Geopolitical shifts drive demand for supply security

The global mining industry is navigating a period of profound transformation, fueled by the demands of sustainability, innovation, and (perhaps most notably) geopolitical fragmentation. The PwC report, which analyzed the world’s largest mining companies, points out that the search for secure and diversified supply chains for critical minerals is a top concern.

As major economies like the US, Canada, Australia, and Chile develop strategies to lessen their reliance on concentrated sources – particularly amid China’s dominance in processing many essential minerals – Brazil’s position as an alternative supplier gains relevance.

“In this scenario, Brazil can benefit as a reliable supplier of strategic minerals, especially if it strengthens its logistics infrastructure and regulatory stability,” said Patricia Seoane, partner at PwC.

The number of deals in critical minerals fell in 2024, from $428 billion in 2023 to $245 billion in total value of transactions. Energy transition minerals accounted for a smaller share of activity than in previous years, though a few single large transactions tipped the scales and if ignored, the trend remains mostly steady.

Sustainability and social license challenges

Globally, the industry is accelerating its decarbonization efforts, committing investments to electrification, improved efficiency, and renewable energy. The study also noted the rapid adoption of automation, citing a 39% annual growth in the number of autonomous trucks in global operation.

Despite the potential for growth, the report underscores the imperative for Brazilian miners to strengthen their social license to operate through a stronger focus on Environmental, Social, and Governance (ESG) criteria. This is particularly relevant in light of increasing regulatory demands, the context of the energy transition, the need to protect local and indigenous communities, and past environmental disasters like Mariana and Brumadinho.

The Mariana dam disaster was a catastrophic flood stemming from a failure at an iron ore mine that killed 19 people in 2015, and the Brumadinho disaster was a similar flood caused by a dam at a separate iron ore mine in 2019, which claimed the lives of 270 people. Both disasters were linked to negligence and both occurred in the state of Minas Gerais, a region with a long history of mining that even derives its name from mining.

Technology and collaboration as future growth pillars

In order to succeed, the mining industry in Brazil needs to take advantage of emerging innovations. The report points to digitalization and automation as key strategies for Brazilian miners to boost efficiency and mitigate operational risks, especially concerning dam safety.

“In Brazil, there is room for greater adoption of technologies such as remote monitoring of dams, use of AI for mineral prospecting, and blockchain for traceability of origin,” said Seoane.

To effectively manage these changes, mining companies are increasingly forming strategic alliances beyond their traditional boundaries to acquire necessary technical skills and are collaborating closely with governments to establish favorable regulatory environments.

“It is a time of challenges, but also of immense opportunities, where collaboration between all the links in the value chain will be the key to shaping the future of a greener and more resilient economy,” added Seoane.