São Paulo, August 5th (Argus) - According to the Brazilian American Chamber of Commerce (AmCham), by 2050, the country's key mineral industry could contribute up to 192 billion reais (37 billion US dollars) to its GDP.
The Brazilian American Chamber of Commerce is the world's largest overseas-based, US-centered business association. On August 4th, the organization released a study assessing the economic benefits that the key mineral industry could bring to Brazil's GDP.
For this purpose, two scenarios were set.
In the first scenario, investment will mainly come from domestic capital. The production of key minerals will still mainly consist of low-value-added products such as lithium spodumene and rare earth carbonates, and the degree of domestic downstream industry integration will be zero or very low.
This scenario focuses on increasing the production of key minerals by 2050, requiring an investment of 104.8 billion reais. The new output will increase Brazil's GDP by 1.1%, equivalent to an increase of 12.86 billion reais, and create 304,000 jobs.
The second scenario assumes that more foreign investment will be obtained, expanding the processing capacity of mineral products in Brazil, while the domestic industry will increasingly use high-value-added key mineral products. The investment required to support this expansion is 120.8 billion reais, but the return could increase Brazil's GDP by 1.6% by 2050, equivalent to an increase of 19.2 billion reais, and create 750,000 jobs.
According to the data from AmCham, vertical integration consolidation of Brazil's key mineral industry will bring a GDP increment gain of 63.4 billion reais, and promote an increase of 32.3 billion reais in domestic high-value-added key mineral product consumption.
The research results are consistent with the direction of Brazil's president to achieve vertical integration of the key mineral industry domestically. However, industry insiders remain skeptical about the feasibility of building downstream processing plants in Brazil without large-scale government subsidies.
Output is expected to increase
AmCham also predicts that the production of various key minerals in Brazil will increase, including cobalt, which is currently not produced in the country.
AmCham predicts that by 2050, Brazil's copper, graphite, lithium, nickel, cobalt, and rare earth production will continue to increase, with rare earth and graphite experiencing the most significant growth.
Brazil has the second-largest rare earth reserves in the world, but its production is extremely low. AmCham predicts that Brazil's rare earth production will increase from 20 tons in 2024 to 12,800 tons in 2050, with a compound annual growth rate (CAGR) of 28%.
Graphite production is also expected to increase significantly, from 68,000 tons to approximately 16 million tons, with a compound annual growth rate of 12.9%.
