Aggregates

Aggregates

Dreamstime

Aggregates – essentially sand and crushed stone – are the most consumed minerals in the world.

PRODUCTION OF AGGREGATES MILLIONS OF TONS

900 800 700 583

600 500 400 300

273

281

316

331

358

390

426 446

451

469

489

509

610

637

666

696

731

768

807

529

200 100 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Anepac – 2012

In 14 years, the demand for construction aggregates jumped from 460 million tons in 1997 to 673 million tons in 2011, representing a 46.2% growth rate or an annual growth composite rate (CAGR - Compound Annual Growth Rate) of 2.8% pa. Now, with regard to 2001-2011, demand growth was 92.3%, i.e., a CAGR of 6.8% per year, which represents a remarkable increase in consumption.

Information and Analyses on the Brazilian Mineral Economy • 7th Edition

The term “construction aggregates” is used in Brazil to describe a segment of the mining industry that produces raw or processed minerals for immediate use in the construction industry.

The mining sector was one of the few that was not hit by the international crisis in 2008-9 and 2011-12.

17

States/Regions

Consumption of aggregates (t)

Amazonas

10,511,744

Pará

19,012,575

Acre

1,888,866

Rondonia

7,408,262

Roraima

1,183,520

Amapá

1,801,562

Tocantins

4,192,791

North

45,999,319

Bahia

37,702,689

Alagoas

7,484,543

Sergipe

5,769,790

Pernambuco

26,778,265

Paraíba

8,823,781

Rio Grande do Norte

8,547,150

Ceará

19,692,468

Piauí

6,696,278

Maranhão

14,024,997

Northeast

135,519,961

Goiás

23,595,020

Distrito Federal

14,915,681

Mato Grosso

11,426,783

Mato Grosso do Sul

8,572,237

Mid-West

58,509,721

São Paulo

177,158,361

Minas Gerais

71,076,418

Rio de Janeiro

61,930,077

Espirito Santo

13,877,637

Southeast

324,042,493

Paraná

41,941,737

Santa Catarina

28,455,865

Rio Grande do Sul

39,272,768

South

109,670,369

Brazil

673,741,863

6.83%

20.11%

8.68%

48.10%

16.28%

Source: ANEPAC – 2012

PER CAPITA CONSUMPTION Brazil’s indicator for the consumption of aggregates in 2011 was 3.50 tons per capita. Brazil’s per capita consumption rose from 3.3 tons of aggregates per capita/year in 2010 to 3.5 tons per capita in 2011 – an increase of 6%. Compared to the developed world, Brazil is still quite far from the historical average of 6-7 tons per capita/year (e.g. United States).

Dreamstime

Aggregates Information and Analyses on the Brazilian Mineral Economy • 7th Edition

18

AGGREGATES IN BRAZIL – 2011

The graph shows the curves of aggregates, sand and gravel in 1997-2022.

CONSUMPTION OF AGGREGATES IN BRAZIL

Aggregates

Based on the correlation of the growth in demand for cement and in Gross Domestic Product (GDP), growth for 2012-2022 was projected, starting with an estimated demand of 696 million tons in 2012 and reaching the significant amount of 1.12 billion tons in 10 years.

MILLIONS OF TONS 1,200

1,000

800

600

200 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Anepac – 2012

Aggregates

Sand

Gravel

THE IMPORTANCE OF AGGREGATES • • • •

For every kilometer of a subway line, 50,000 tons (t) of aggregates are required; Paving a road requires about 9,800 tons of aggregates per kilometer; Building a 50 sq m low-cost house consumes 68 tons of aggregates; The construction of a building requires 1,360 tons for every 1,000 sq m.

Brazil’s increased investments in infrastructure for the Country to host the 2014 World Cup and the 2016 Olympics will ensure that demand for aggregates will continue to increase by 2022. The aggregates sector in Brazil is experiencing a virtuous cycle supported by investments in infrastructure and housing works as a result of improved income levels, reduced unemployment and falling real interest rates and thus greater availability of credit. The demographic boom is also a positive factor in the sustainability of this growth for at least another decade. While strong demand for aggregates is expected to hold up in the medium and long terms, oneoff drops do occur in industries connected to the construction sector, as seen in June 2012, with a decrease of 8.5% in steel production, according to the Brazil Steel Institute, and 9% in construction materials trade, according to Anamaco (National Association of Construction Material Dealers).

Information and Analyses on the Brazilian Mineral Economy • 7th Edition

400

19