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Finding a place to stay is not so easy
these days in the Brazilian mining town of Itabirito.
Hotel rooms are scarce and rents have
climbed, say locals, as outsiders descend on the hilly settlement in search of
their fortunes — or maybe just a steady wage — from the iron ore deposits found
in this tropical region of green valleys and streams.
Prices for the steelmaking
ingredient have rallied over the past year, turning the modest town of
about 60,000 people into a hotspot of the global commodities boom.
“It’s a special moment,” said mayor Orlando
Caldeira. “Commerce is in full swing, even with the pandemic and all its
difficulties”.
As growth returns around the world with the
lifting of coronavirus restrictions, buoyant demand for raw materials and basic
foodstuffs is proving a godsend for Brazil’s miners and many of its farmers.
Located in the so-called ‘Iron Quadrangle’ of Minas Gerais state, whose history is steeped in the pursuit of gold and diamonds, Itabirito has witnessed an explosion of employment as well as a windfall for the public coffers.
The municipality, an hour’s drive from
state capital Belo Horizonte, received R$59m ($11.5m) in income from mining
royalties during the first quarter of 2021, an eightfold increase on the same
period last year.
Its new found prosperity, however,
contrasts with the hardship faced by many Brazilians as a result of Covid-19.
The disease has killed more than 500,000 people in the South American nation
and pushed the jobless rate to almost 15 per cent.
“We haven’t had mass unemployment,” said
Caldeira, estimating that 80 per cent of the 3,600 roles created last year were
linked to mining. “On the contrary, there’s a surplus of vacancies”.
Agile Minerals, a manufacturer of mining
equipment and components, opened a new facility in a former car parts factory
in Itabirito last year and has tripled its workforce to 300.
After being made redundant as a result of
the pandemic, 32-year-old Mariani Vaz returned to her hometown for a position
with the company after more than a decade away.
“I want to build a life here, because we
have opportunities,” she said. “The town is small and we know everyone, but I’m
seeing a lot of new faces. Life here is a little more expensive than other
towns in the region, but it’s worth it.”
On an evening at the end of the week,
walking home in overalls is Edir, in his 50s. Unemployed after the closure of
an alloys plant in 2016, he found work a year ago at a local iron ore producer.
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In his view, rightwing president Jair
Bolsonaro can take some credit for the industry’s success. “Things are
improving — you can see the movement. The market is hot,” he added.
A weak exchange rate, while hitting
consumers with inflation, has been a blessing for Brazilian miners. It lowers
their operating costs compared with overseas rivals and boosts earnings in the
local currency, as iron ore is quoted in dollars.
Shares in Brazil’s Vale, one of the world’s
largest iron ore suppliers, are up by almost a fifth since the start of 2021
and last month it posted a 600 per cent year-on-year jump in quarterly net
income to $7.6bn.
The country’s exports of the mineral,
largely bound for China, are forecast to surge in value by three-quarters to
$45.2bn this year and displace soyabeans as the main source of foreign
exchange, according to a trade association.
The effect of this bonanza is already
rippling out across Itabirito. In the town centre, an unfinished nine-storey
apartment block stands incongruously. One estate agent said there were 10
interested parties for every empty plot he was selling in a gated community.
Past a valley where luxury homes with
spacious gardens are under construction, an artisanal dairy churns out Mineiro
delicacies — a variety of cheeses and doce de leite, or caramelised milk.
“All these people coming to work here has
given a boost to trade, especially during the pandemic,” said Cristian Coelho
Diniz, whose family owns the business.
But her confidence is not shared by all
residents. Several shopkeepers said trade was yet to fully recover, despite the
fall in Covid cases.
Nor does the mining industry attract
universal admiration, with memories of lethal accidents elsewhere in Minas
Gerais never far away. In 2015, a mining waste dam ruptured in the township of
Mariana, an ecological catastrophe in which 19 people died.
The collapse of a Vale dam in Brumadinho
just over three years later unleashed a wave of industrial sludge that killed
270 people.
The incident sparked panic and led to the
evacuation of families living by dams close to Itabirito. Last month, Vale
completed construction of a giant wall to protect nearby communities in the
event of a breach.
“[We have] been investing in new
technologies to increase ore processing and reduce the impact on dams,” said
Karina Rapucci, a manager at the company.
While Vale reckons there is another 70
years’ worth of iron ore yet to be dug in the area, local politicians are
already planning for the future — including the inevitable market downturns.
After touching an all-time high above $230
per tonne in May, prices have dropped sharply in recent weeks to about $170 as
China pledges steel production cuts to reduce its carbon emissions.
As well as investing in a new health
clinic, crèche and road resurfacings, Caldeira, himself a former engineer at
Vale, wants to lessen the local economy’s dependence on the commodity by
boosting tourism and other activities.
Even if it does not boast all the stunning
colonial architecture of neighbouring Ouro Preto, he believes the town still
has more to offer than just iron ore.