Vale conducting exploration drilling in Brazil | Courtesy of Marcelo Schwarz
“The dignity of movement of an iceberg is due to only one-eighth of it being above water.” ~ Ernest Hemingway
Exploration companies that operate in Brazil can probably identify with Hemingway’s admiration of the large and slow-moving. With only one third of its 8.5-million-square-kilometre landmass geologically mapped, Brazil is literally an emerging country, with vast parts of its territory shadowed by the Amazon
rainforest. On one hand, nobody doubts the country’s huge geological potential could double or even triple its current production. But on the other, Brazil
moves at its own pace, mired in bureaucracy, with red tape often hindering exploration and development projects. For the exploration companies that sit on
the tip of the iceberg, the country certainly offers a great lesson in patience.
“I can understand why Peru, Ecuador and Argentina have more companies and higher budgets in exploration than [what] Brazil has,” says Marcelo Schwarz,
country manager for Brazil at INV Metals. “But when I talk with friends who work in these countries, we always agree that Brazil has more geological
Schwarz’s feelings are common in exploration companies. Everyone agrees that Brazil is lagging behind. In fact, according to a recent report on mining by Global Business Reports, Brazil attracts 11 times less exploration capital per square kilometre than Peru, and 18 times less than Chile. In 2010, the
country received only three per cent of global exploration expenditure.
The main debate around exploration in Brazil is centred on who – between the state and the private sector – is responsible for detailed mapping of the
country’s resources. The Serviço Geológico do Brazil, or CPRM, Brazil’s national geological service, considers this task incumbent on the private sector.
Mining companies believe it should be the CPRM’s mandate. Even though CPRM has commissioned a series of surveys to evaluate the hydrology and geology of
the country, the debate is far from being over.
Schwarz, who is Brazilian, is well aware of this predicament. “I know lots of people who work at CPRM, and what I can say is that they have great people,
but they don’t have good budgets,” he says. “So it is pretty hard for people who work there to do a proper job, and that is why Brazil has this lack of
geological mapping throughout its territory.”
Peru invested twice as much in geological surveys as Brazil in 2009, with a territory seven times smaller. “Peru has a much better geological database,”
points out Rick Brown, vice-president of business development at Amarillo Gold. His company works exclusively in Brazil, attempting to define gold
resources. “In Australia or in Canada, the provincial geological surveys are getting down to 1:25,000 [scale]. There is nothing like that at all in Brazil
This does not mean that CPRM’s services are of absolutely no use. In fact, they helped in the discovery of INV’s Itaporã gold project, in Pará state. “INV
got some of the geophysical airborne surveys from CPRM, and then got the claims,” says Schwarz.