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July 29, 2016

MINERAL COAL IS ON THE AGENDA FOR DISCUSSION AT THE WORLD MINING CONGRESS 2016

 

 

The Brazilian mineral coal industry currently comprises 14 companies, which directly employ more than five thousand people. In the states of Rio Grande do Sul, Santa Catarina and Paraná, the Thermoelectric-power chain generates approximately 53 thousand jobs and turnover is around R$12 billion per year. The president of the Brazilian Mineral Coal Association (ABCM), Fernando Zancan, who has already confirmed his presence at the 24th edition of the World Mining Congress (WMC 2016), had a chat with IBRAM and explained a little about this sector, which is so important to the Brazilian mining industry.


At WMC 2016, Fernando Zancan will be the moderator of the panel "National Coal, the View from India and China", which shall take place on the 20th October at 10h45. Wang Xianzheng, President of the Chinese National Coal Association (CNCA), and Piyus Goyal, Indian State Minister for Coal, will be the other panel members.


The complete interview follows:


IBRAM - What is the current scenario of the Brazilian mineral coal industry in Brazil?


The mineral coal industry is currently of great importance to the south of the country. There are ten companies operating in Santa Catarina, one in Paraná and three in Rio Grande do Sul.


In Rio Grande do Sul and Santa Catarina, the Financial Compensation for the Exploration of Mineral Resources - Compensação Financeira pela Exploração de Recursos Minerais (CFEM) colected is around 36%. In addition, within the mining production chain in Santa Catarina the mineral coal industry involves rail transportation - for example, there is a specific railway for the transportation of coal to the Jorge Lacerda Thermoelectric Complex.


IBRAM - What is your forecast for the sector for the next few years? Given that Brazil's energy security involves thermoelectric plants, what are the main projects currently being developed?


The expansion of the mineral coal sector essentially depends on the electrical energy market and this market is currently shrinking. A Copelmi Mineração mine will be opened in 2018 to supply a plant, which will be brought online in 2019. For the next three years, however, no new coal projects are envisaged; therefore, we should not see any growth in 2020, 2021 and 2022. There is however the capacity to increase the production of the existing industrial setup, due to hydrological issues - if it doesn't rain, the demand placed on the thermoelectric plants will be higher.


But, if we don't create a modernization programme for the next two years, plants will be deactivated for economic reasons, for example. We have already presented a proposal to the government, given there are already several coal power plants that need to be modernized. 


In terms of new technologies, within the proposed modernization programme, there is an important discussion regarding the types of technology that must be used. The idea is that we improve the efficiency of the plants in order to produce more Megawatts while maintaining the same level of carbon dioxide emissions. The whole world is seeking such modernization, deactivating old and inefficient plants, and opening new mines. As a result, we are investing in a project with the United States Energy Department to develop laboratory technology to capture carbon dioxide. The physical part of the lab will be in Criciúma and finished in 2016. The idea is to install a pilot plant in 2017. This will be the first laboratory in Latin America dedicated to capturing CO2. 


IBRAM - How did the Associação Beneficente da Indústria Carbonífera - Charitable Association of the Santa Catarina Carbon Industry (SATC) come about? How does society benefit from this type of project?


In 2007/2008, we began to set up the Centro Tecnológico de Carvão Limpo - Clean Coal Technology Centre (CTCL). As we have access to financial resources provided via the CFEM, we also managed to obtain federal resources. Today, the school serves 7.7 thousand students in a total area of 55 hectares. We offer Infant, Junior and High School Education, 19 technical courses, Vocational Training, 11 higher education and 9 post-graduate courses. The school building is efficient and was designed with the use of the latest technology in mind.


One can see that the benefit to the society of Criciúma is very high and we are certain that, if the CFEM collected in each state was directed towards research and development or used to add value to the ore, the resources would be well applied.


We estimate that for each R$1.00 invested the "return" for society is R$4.00. In the specific case of Mineral Coal, we know that these resources are very well applied and, through this type of investment, we are able to leverage products and processes, in addition to add more value to the mineral.


IBRAM - What are the main challenges and obstacles faced by the Brazilian productive sector?


I believe that the main challenge is to resolve the issue of the Mining Code. Define what the rules are. The investor wants and needs to have clear and stable rules. Our undertakings are long-term ventures and we need investment security. In relation to environmental licencing, our goal is that it is dealt with in a technical and swift manner, which provides legal certainty.


In addition, we need to show society that mining is one of the planet's oldest activities, like agriculture, and that without it, we aren't able to move forward. We need mineral goods for everything. It is therefore necessary to valorise the activity.


As the Brazilian coal industry is very small, another challenge is to create a new industrial policy. The first point of this policy is, without a doubt, modernization - modernize to prepare the industry for future expansion. It's a fact that the country will need to use thermoelectric plants as part of its energy system, because they are low cost and not subject to variations in international commodities, exchange rates and prices.


WMC 2016


The World Mining Congress (WMC), one of the biggest world mining events, will be held in Rio de Janeiro (RJ) between the 18th and 21st October 2016. The Brazilian Mining Institute (IBRAM) is organizing the 24th edition of this event, which was first held in 1958, and the theme is "Mining in a World of Innovation".

 

Source: IBRAM – Profissionais do Texto

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