How important is the mining activity to the country’s economy?

About Vale

7/14/2017

How important is the mining activity to the country’s economy?

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An important source of income, mining is a financial and economic support for the country. In Brazil, the activity becomes a major character in this context, due to the potential of the national soil, characterized by its differential aspects and wealth. Mining is one of the basic sectors of the Brazilian economy. See below 5 factors that explain the importance of the mining activity for the country’s economy:

See below 5 factors that explain the importance of the mining activity for the country’s economy:


  • 1

    Economic balance

    The ore extraction activity balances national growth rates. Do you want a good example of this? The surplus record (when the export of products is greater than the import) in the Brazilian trade balance in the first semester and in June 2017. Behind the good result, we have mining. This is because iron ore is one of the main commodities Brazil exports. The increase in ore prices and the Vale’s successive production records in recent quarters contributed to the increase in the value of domestic exports.


  • 2

    Historical influence

    Mining attracts many investments and has good financial returns. And this potential of the sector was visible since the period of colonial Brazil. At that time, the extraction of ores was responsible for part of the occupation of the national territory and, mainly, for the economic balance and generation of wealth. What would be the consequence of this fact? Brazilian soils called the attention of foreign markets. It is no wonder that, throughout the 17th century, the inland areas of the country received several expeditions in search of valuable metals and precious stones.


  • 3

    Connection with social phenomena

    Ore extraction is associated, to a greater or lesser degree, with all social phenomena and is linked to practically all issues of growth and development in the country. The history of mining in Colonial Brazil reveals this strong influence of the sector. During the colonial period, the gold found in the country was taken to Portugal and generated profit even for England, which would have financed the Industrial Revolution with part of the wealth taken from the Portuguese colony. Not to mention that, with the wealth brought by the extraction of gold at the time, a new consumer class emerged in Colonial Brazil: the middle class.


  • 4

    Influence on national GDP

    Did you know that mining in Brazil is responsible for almost 5% of the national GDP? Mining offers products for diverse and varied types of industry such as iron & steel, fertilizers, petrochemical and metallurgical industries. With an eye to this potential for ore extraction, many government initiatives focus on investment and modernization of the sector. And the result is rapid growth of the segment and significant returns to the country’s economy.


  • 5

    Job generation

    Mining contributes to the creation of numerous direct and indirect jobs, precisely because it offers raw material for several types of industry. After all, what would the vehicle assembling industries be without steel, glass and petroleum products, which comes directly from mining?

    It is precisely this indirect connection with other industries that makes the ore extraction one of the main sources of job generation. A study made by the consulting firm PriceWaterhouseCoopers among suppliers of mining equipment in the Province of Ontario, in Canada, revealed that only the industry sector generates 40.960 thousand direct jobs and 27.471 thousand indirect jobs, paying US$ 4.6 billion in salaries.

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How important is the mining activity to the country’s economy?