Mato Grosso discovers a new reserve of iron ore

Mineral prospection work conducted in Mato Grosso has identified another reserve of iron ore, with an estimated size of 11.5 billion metric tons, the State Government informed this Wednesday. The area within the municipality of Mirassol d’Oeste is privately owned and belongs to mining company GME4, which has prospection rights for this area.

The Opportunity group, owned by banker Daniel Dantas, has a majority participation in GME4 with a 62% stake, as informed by the Press Relations Department of this institution.

– This is our pre-salt, commemorated the Governor of the State of Mato Grosso, Silval Barbosa (Brazilian Democratic Movement Party – PMDB), who is running for re-election.

The Carajás mine, considered the largest open-air mine in the world, has total reserves of some 3 billion metric tons of iron ore. The discovery of these ore deposits in Mato Grosso was made as part of research of the local government seeking to find deposits of potassium and phosphate, as the state is a major agricultural producer.

The iron content in the ore of this reserve is about 41%, the local Government has said during a press interview. That of phosphate is 6.5%. Despite the large potential size of this deposit, the iron content is less than that of the best projects in Brazil, like Carajás, owned by Vale, which has an iron content of 67%.

The President of the Federation of Agriculture and Livestock Raising of the State of Mato Grosso (Famato), Rui Prado, estimates that, if the local production capacity is confirmed, the sector could save R$ 400 million (US$ 232.15 million) per year on purchases of phosphate-based fertiliser.

According to the National Department of Mineral Research (DNPM), the total known iron ore reserves in Brazil up to 2007 came to 17.38 billion metric tons, with differing iron contents.

In the prospection work in Mato Grosso, which was made in partnership with the federal government as part of the Phosphate Brazil Program, there was also the identification of phosphate reserves totalling 427 million metric tons.

– The iron content of 41% is not the best wonder of the world, but could be feasible. The main issue here is how to ship this production out – in the assessment of the manager of Banif Investment Bank and mining specialist, Catarina Pedrosa.

Logistics is the challenge

Logistics for the development of mining activities in the state could be a challenge.

Mato Grosso, which is the most important producer of soybeans in Brazil, is already having problems to transport the soybean harvest, not having a transport system with competitive costs.

Distant from the exporting ports, the railways and waterways still need expansion, so that any production can get to the international markets with lower costs.