Brazil gold exports breaks record

Brazil gold exports have hit a record, following rising international prices prompted by fears that the world is on the brink of recession. People are buying and storing the precious metal to protect their heritage.

In 2018, Brazil sent 95 tons of gold abroad — a 150% growth in ten years, according to statistics from the Ministry of Economy. Until July of this year, another 51 tons have been exported.

Brazilian gold leaves Cumbica airport and goes to different destinations, mainly Canada, the United Kingdom, Switzerland, and India. Exports currently absorb most of Brazil’s production, estimated at 97.1 tons.

This volume corresponds only to formal production, made many meters deep by specialized multinational companies, such as AngloGold Ashanti, which has been mining gold in Brazil for 185 years, or Canadian Kinross.

But there is an informal, unaccountable market in which gold is manually mined by prospectors on river banks or in mines near the surface.

The revival of Brazilian gold production comes at a time of favorable prices – the highest levels in the last six years. Last Friday (08/16), gold closed at US$1,513 per ounce (traditional measure of this metal), driven by uncertainties generated by the trade war between China and the United States.

According to the World Gold Council, a global organization focused on the development of the gold market, demand is breaking a world record, driven by jewelry consumption in India, by purchases made by banks and brokerages to support the sale of gold-backed contracts, and mainly by purchases from central banks.

In the first half of this year, central banks purchased 374,100 tons of the metal – the largest net increase in global gold reserves in the past 19 years.

Fears of a new global recession, triggered by the trade war started by United States President Donald Trump, led the monetary authorities to increase the purchase of gold to secure the value of their currency.

According to industry experts, companies based in Brazil have been taking advantage of the opportunities generated by the favorable market, because they are now maturing the investments made at the beginning of the decade. Gold mining, they explain, requires high technology, because the mines are getting deeper and deeper.

But there would still be a long way to go. Globally, Brazil is a marginal competitor. According to the World Gold Council, the country ranks 11th in the gold production ranking, far behind countries like China, Australia, Russia, and the United States.

Nothing compared, therefore, with the central role played by Brazilians in the late 18th century, when the reserves of Minas Gerais made the country, still a colony of Portugal, the world’s largest producer of gold, accounting for 40% of the global volume.

The greatest growth prospects would be outside the traditional Minas Gerais producing regions. According to the National Mining Agency, Goiás is today the largest gold producer in Brazil. In 2018, the state accounted for 38.7% of the total extracted in the country, above the 35.8% of Minas. Then comes Pará, with 14.3%.

Source: Folha de S. Paulo

Sharing is caring!