Expo 2010 Shanghai China

05/July/ 2010

Paulo Camillo Vargas Penna

Investment Opportunities

in BrazilIBRAM – The Brazilian Mining Association

Non-profit private organization that represents the Brazilian Mineral Industry;

Founded in 1976;

Congregates 182 companies [mining and non-mining];

Represents more than 85% of the Brazilian Mineral Production (US$ 24 billion in 2009 – excluding oil and natural gas).

IBRAM has two regional offices in the States of Minas Gerais and Pará. The Headquarters is located in Brasilia - Capital of Brazil.

IBRAM- Brazilian Mining Association

INVESTMENT OPPORTUNITIES IN BRAZIL

Opportunities in Mining Sector

Opportunities in Mining Infrastructure

Opportunities in Mineral Exploration

New challenges in Mining in Brazil

Opportunities in mining sector

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população rural

população urbana

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1,0

1,5

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população rural

população urbana

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Drivers of demand

Urbanization of the World Population

Economic Perspectives

WorldWorld

Rural

Urban Urban

Rural

2050 2009$80

$70

$60

$50

$40

$30

$20

$10

$0China USA India Brazil Rus USA Japan GerChina UK

US$ trillion

Fonte: Goldman Sachs, september 2008

The 5 largest Economies Current comparison and a project for the year 2050

Brazil in a Global Context

GDP > US$ 1 trillion

Area > 5 million Km² Pop > 150 million

Russia

USA

BRAZIL

China

Canada

Australia

Germany

Spain

Italy

South Korea

France

United

Kingdom

Mexico

India

Japan

Indonesia

Pakistan

Nigeria

Bangladesh

BRAZIL-Social and Economic Overview

LONG-TERM TRENDS – 5-YEAR AVERAGES

2000-04 2005-09 2010-14

Population (million): 174.6 185.4 200.6

GDP (USD bn): 566.8 1,346 2,222

GDP per capita (USD) 3,244 7,240 11,062

GDP growth (%) 3.0 3.6 4.8

Inflation (%) 8.7 5.1 4.6

External Debt (%of GDP) 38.9 14.7 11.9

Land Area (km²) – 8,511,965

Opportunities in mining sector

Not included oil and gas

Evolution of The Brazilian Mineral Production in US$ Billion

Estimates are for the Brazilian Mineral Production to reach US$ 35 Bilion in 2010

Variation 2000/2008

250%

2008 = US$ 28 Billion

2009 = US$ 24 Billion

Year 1009080604020098969492908684828078 88

35

25

20

15

10

5

0

Main Brazilian Mineral Provinces

Bacia do Reconcavo -Tucano

Rondônia

Bacia do Paraná

Maciço de Goiás

Borborema

Vila Nova

Centro-Sul Baiano

Rio do Peixe

Escudo Sul Rio Grandense

Bacia do Bambuí e Espinhaço Meridional

Opportunities in mining sector

Brazilian Status on the Mineral Global Market

Exporter

Global PlayerExporter Self Sufficiency

Importer/

ProducerImporter

Nickel

Magnesium

Kaolin

Tin

Vermiculite

Chrome

Mica

Niobium (1st)

Iron Ore (1st)

Bauxite (2nd)

Manganese (2nd)

Graphite (3rd)

Crysothile (4°)

Tantalum (2nd)

Dimension Stone (4°)

Limestone (cement)

Industrial Diamond

Titanium

Gold

Tungsten

Talc

Zinc

Phosphate

Zirconite

Diatomite

Copper

Metallurgic Coal

Sulfur

Potash

Rare Earth Elements

Opportunity?

Opportunities in mining sector

Major mineral products imported in 2009 and 2008

Opportunities in mining sector

2009 S* 2008 S* ∆ 09/08 %Total Brazilian Imports 127.647 - 173.196 - (26,30)

Mineral Primary Goods Imports 5.497 4,3 9.729 5,6 (43,50) Metallurgic Coal 2.181 40 3.691 38 (40,91)

Potassium 2.060 37 3.828 39 (46,19)

Sulfur 197 4 1.039 11 (81,04)

Phosphate 84 2 312 3 (73,08) Outros 561 10 1.019 10 (44,95)

Brazil Trade Total Balance 25.347 24.746 2,43

Mineral Trade Balance 12.599 49,7 13.113 53,0 (3,92)

* Share in total Export/Import

Crisis

Investments in Mining Sector 2010 a 2014Evolution of investments estimates in the mineral sector in

US$ billion

Investment in Mining Sector 2010 to 201436

.530

31.5

65

6.71

6

3.54

6

1.00

0

1.50

0

987 2.51

9

2.20

0

2.20

0

2.51

0

2.05

7

2.35

7

2.73

9

1.40

1

979

300

44270

Iron Ore

Nickel Alumina Bauxite Aluminium Phosphate Copper Gold Manganese CoalVanadium

Opportunities in mining sector

New investments in the Mining Sector from 2010 to 2014 – US$ 54 billion

Investments in Mining Sector from 2009 to 2013 – US$ 47 billion

Opportunity in infrastructure

Brazil is one of the countries with the highest mineral potential in the world.

Opportunities in infrastructure

Abundant geological potential to be explored in an 8,514,876.599 km2 continental extension

Infrastructure undergoing an expansion process

Skilled labor creates an environment conducive to the growth of mining and metallurgy in the country.

A country with ample tradition in mining

An enormous territory with the potential for great mineral reserves

Source: Brazilian Association of infraestructure -Abdib

Transportation and Logistics

US$ 13,5

BRAZIL

It is necessary to invest US$ 90 billion

per year in infrastructure

ENERGY

US$ 16

Sanitation US$ 7,5

Telecommunications

US$ 11

Oil and Gas

US$ 42,5

Opportunity in infrastructure

Annual investments necessary in infrastructure in BRAZIL

Indicative areas for port installation and expansion

Opportunity in infrastructure

PortsNew areas for port facilitiesNatural vocation for port activitiesHydrographySouth AmericaBrazil

Milions of Tons Transported

472

22

Mississippi

USA

Brazil

Araguaia-Tocantins

ParaguaiParaná

Atlântico Sul

São Francisco

Parnaiba

Amazônica

Atlântico Sudeste

Opportunity in infrastructure

Brazil’s Main Hydrographic Basins

Opportunities in Mineral Exploration

Canada

(US$ 1,2 billion)

16%

Australia

(US$ 1 billion)

13%

BRAZIL

(US$ 234 million)

3%

Opportunities in mineral exploration

Mineral Exploration Investments by the 10 Leading Countries2009

Source: Metals Economics Group

Opportunities in Mineral Exploration2004 – 2008 Program:

mapping 30% of the Brazilian Territory focused on mineral

potential areas.

LEGEND

Sedimentary areas

Basement areas

PREVIOUS MAPPING PROGRAM

Maps 1:100.000

Maps 1:250.000

Program

2004-2008

Maps 1:100.000 (283)

Maps 1:250.000 (94)

NEW CHALLENGES IN MINING

Mining Process

Indigenous Areas

Indigenous Areas: 13% of National Territory 25% of the Amazon Region

New Challenges Mining in Indian Lands

New Challenges Brazilian Continental Platform

Aggregates GoldDiamondCoalPhosphateCobaltOthersTerritory emerged 8.500.000

Exclusive economic zone 3.500.000

Extension of the continental platform referred to the UN

Total area of continental and marine

1.000.000

13.000.000

New Challenges Modification of Monopoly - exploration and mining of Nuclear Ores

Inasmuch as Brazil has only 30% of the territory prospected for Uranium, the country ranks as the 7th richest nation in the world in this mineral.

Currently Brazil has a reserve of 310 thousand tons, but there are estimates that it has more than 800 thousand tons, which will bring the country to rank the second or third largest reserves in the world.

Investment opportunities in the BRAZIL

Conclusion

BRAZIL TODAY

Macroeconomic stability

Sustainable growth

Need to expand and improve its infrastructure

Needs to increase the area of geological and geophysical mapping

Great opportunities for investments in mining companies

Thank You

http://www.ibram.org.br

Paulo Camillo Vargas Penna

President