Brazil Miners & Exporters – Due Diligence

Brazil as a leading mining country

Brazil is one of the most important iron ore producers. Iron ore has traditionally been the country’s largest export product, accounting for 5% of the total value of mineral exports. Japan (13%), Germany (11%), China (22%), India, and South Korea being the main importers of Brazilian iron ore.

The following iron ore mines are located in Brazil: Aguas Claras, Alegria, Alegria/ Germano, Brucutu, Capanema, Carajas, Casa de Pedra, Caue, Conceicao, Corrego do Meio, Corumba, Fabrica/Segredo, Fazendao, Feijao, Gongo Soco, Jangada, Mina do Andrade, Morro Agudo/Agua Limpa, Mutuca, Pico, Tamandua/Capitao do Mato, Timbopeba, Companhia Vale do Rio Doce (CVRD).

Brazil is also a leading producer of the following minerals:

• aluminum, bentonite, metallurgical-grade coal, lead, chrome, sulfur, feldspar, lithium, mica
• nickel, dressing rocks, tantalite, rutile, kaolin, zinc, zirconium, chrysotile, copper, tin, fluorite
• gypsum, magnesite, manganese, niobium

7 Tips on Watching Out for Scammers

Not all exporters are equal on the internet. Many Brazilian exporters are legitimate businesses properly exporting their productions. However, many scammers are taking advantage of inexperienced buyers. Scammers may use one or more of the following tactics to lure buyers and deceive them into paying fake invoices to bank accounts that do not belong to the true exporters

1. Scammers register websites and email addresses similar to those from true businesses

It is difficult for people from other countries to realize when they are accessing a clone website or not. Scammers will clone the websites of reputable suppliers and add pictures of real people to make these websites look quite legitimate.

2. Scammers clone invoice templates used by true companies

A good-looking invoice doesn’t mean it is a legitimate invoice. Confirming directly with the exporting company if the invoice was issued by them will assure it is a legitimate invoice. And, of course, you shouldn’t use the phone number, address or email address provided by a potential scammer.

The best approach is to get the contact information independently from one of the reputable directories in Brazil to make sure you are not contacting the scammer itself. Cross-checking information with the help of third parties is one of the most effective ways of not falling into a scammer’s trap.

3. Scammers usually offer a price lower than the market average to attract buyers

Greed is the main reason why so many buyers decide to run unreasonable risks. The desire to make big profits is the number one reason why so many people are deceived by scammers impersonating Brazilian exporters. Is the price too good to be true? Your source is the only one with a product available while everyone else already sold their production several months upfront?

Be a common-sense person and realize that anything too good to be true is probably a scam

4. Scammers may have a bank account with a name similar to that of a true miner

A Brazilian bank would be wary of a scammer opening a bank account under a company name of a legitimate exporter. Scammers may work around that by opening bank accounts under the same name of the exporter in other countries (e.g.: USA or Portugal).

Banks outside of Brazil have no way to check that a scammer is actually cloning the name of a Brazilian legitimate company. The scammer will usually tell the victim buyers that the bank account is opened outside of Brazil to facilitate payment. It is not impossible, however, that scammers also use a bank account in Brazil.

5. Scammers may demand fast payment in order for the buyers to secure a great deal (fake, obviously)

Brazilian exporters usually sell their production a long time in advance, and the demand is usually higher than the offer. For this reason, exporting Brazilian companies may not be very fast to reply to your inquiries or appear that excited to sell or negotiate with you. Scammers, on the other hand, will be fast to reply and make “the purchase process” very easy for the inexperienced buyer.

Scammers will also often push the buyer to make some downpayment “immediately to secure a business”. Scammers know that the more time the buyer has, the higher the chances they will be exposed. Therefore, scammers need to push victims to wire some money very quickly to succeed in their scams.

6. Scammers may stay around longer than you think

How can scammers deceive importers, steal hundreds of thousands of dollars and stay around without being caught by the police? Scammers are usually more sophisticated than the usual crook. Scammers targeting importers usually know how to combine technology, global business, and psychology to deceive buyers. They may be located anywhere on the planet. A bank account in the US or Portugal doesn’t mean they are living in these countries.

They may have opened a bank account in these countries many years ago and used a debit card in another country to withdraw the funds deposited by victims. But, won’t the police catch them? The police don’t know about all the scams going on.

Once an importer becomes a victim, there is little motivation for this importer to report the scammer. If the importer takes the time to report the scam, this means the importer will be wasting valuable time on top of the already lost money. A deceived importer probably thinks that chances of recovering the money deposited into a scammer’s account are slight to none. Most victims will conclude that it is not worth chasing scammers hidden in a remote location. As a result, most victims will not bother reporting the scammer.

Even if a victim wants to denounce a scammer, how would they do so? Call the bank where they sent the money to? This bank wouldn’t just close a bank account because a random party is calling and saying that the bank account holder is a scammer. For a bank to be able to close a bank account, or even open an investigation, a judicial process should be initiated. And, who would spend big bucks to start legal action against a hidden scammer? 

7. Once the money is into someone’s account, costs to try to recover may exceed the loss.

A lawsuit in Brazil or abroad may cost dozens of thousands of dollars to initiate. If it happens for such a lawsuit to last long (e.g.: it is not rare for lawsuits in Brazil to last longer than a decade), you may spend several times the price tag needed to start the lawsuit.

No lawyer in Brazil would consider working based on a contingency arrangement. Would you accept to work just based on results on a case that may take a decade of your work, judicial fees, and without any assurance of success? It is not reasonable to expect that lawyers in Brazil will line up to take your case. Unless you are willing to spend big bugs, chances of finding a lawyer to take your case against a case are close to zero.

That’s why the best approach to importing from Brazil is spending money on professional due diligence. It is easy for a professional Brazilian law firm to investigate the party with whom you want to do business. Spending a couple of thousands of dollars to get due diligence done can save you from wasting and losing a lot more. Don’t be cheap – spend some money upfront and keep the scammers away from your wallet.

Expedite Due Diligence Service

Exporter Due Diligence Starting at USD 999.00

Our due diligence service costs a fraction of what you may lose by not getting due diligence done. We have seen dozens of importers from Asia and the Middle East wasting hundreds of thousands of dollars for avoiding a due diligence fee. Don’t be one of them!

Our background checks include steps like

• Checking invoice and paperwork provided by the exporter
• Obtain exporter’s credentials and contact information from independent sources in Brazil
• Communicate with the exporter to make sure they are active and in business
• Share paperwork provided by you so they can confirm if it is legitimate
• Visiting the exporter in person to make sure they are legitimate
• Provide our assessment of the degree of confidence in the legitimacy of your prospective supplier

Peace of Mind You Need

Get the peace of mind that you are not dealing with scammers before transferring your hard-earned money into someone else’s account. Our due diligence service has been used by importers from all continents to reduce the risk of fraud and money loss.

Basic Checks You Can Do Yourself

We do not advise our clients to try to vet Brazilian exporters themselves. It is just too difficult and complex for a foreign citizen to understand the nuances that differentiate a true exporter from a scammer. However, we understand some importers like to take risks. Maybe you don’t mind risking losing $ 100,000? Maybe you have time in your hands to do some of the checks yourself? Maybe your boss is a cheap person who doesn’t like to spend money even if it is for something as important as due diligence?

We get it. Different countries mean different cultures. If taking risks or saving every single dollar possible is how you do business, here are some tips on basic checks you can do yourself. However, remember: you are strongly advised to hire a licensed lawyer in Brazil to assist you with proper diligence. If you don’t hire a lawyer, you are running serious risks.

Basic checks could be done through reputable sources like the Brazilian Mining Association with contact information below. Another effective way of checking prospective exporters is to have an independent third party that you trust visiting the address of the prospective exporter.

Brazilian Mining Association

Brazilian Mining Association
http://www.ibram.org.br/
Click here to access their website in English
+55 (61) 3364-7272
[email protected]
SHIS QL.12 Conjunto 0 (zero) Casa 04 –
Lago Sul – CEP: 71.630-205 – Brasília/DF – Brazil

IBRAM’s members include mining companies; employer’s organisations; mineral engineering, environmental and geology companies; equipment manufacturers, technology centres, and investment banks, amongst others. There are more than 130 members which, directly or indirectly, are part of the Brazilian mining sector.

The association has another website with relevant information about mining in Brazil: http://portaldamineracao.com.br

By clicking on the logo of the associate mining company, you will be taken directly to the mining company website. From there, you can check their contact information for communication on their exports.

Mining Directory of Brazil

Mining Directory of Brazil
https://catalogodemineracao.com.br/empresa/mineradoras
This online directory has about 155 companies registered as miners. It also has other hundreds of companies related to the mining business. As this is not an association, you should not rely on just the contact information found there for potential exporters.

What to Do if I Don’t Speak Portuguese?

We know most visitors to this page don’t speak Portuguese. Unfortunately, this mining directory does not offer its resources in languages other than Portuguese. However, you may be able to access and understand much of the web content made available by the Brazilian courts using the auto-translator feature available in the Chrome browser.

To activate the auto-translation, simply right-click with your mouse while navigating the Brazilian court website in Portuguese and choose “Translate to English” (see image above). This is how the translated page will look like in English. 

Brazilian Mining Operation Map

This is an interactive Map of the Brazilian mines: https://www.google.com/maps/d/embed?mid=19ps2n5FI62X-ib2V2teFhaqcUCbS2BZJ

This map was prepared based on the study “200 Largest Brazilian Mines” published by the Brazilian magazine “Revista Minérios & Minerales”

It is difficult for people from other countries to realize when they are accessing a clone website or not. Scammers will clone the websites of reputable suppliers and add pictures of real people to make these websites look quite legitimate.

600-List of Mines in Brazil

The most complete list of Brazilian mines was published by the Brazilian magazine “Revista Minérios & Minerales” in 2018. The complete list with 600 mines in Brazil is available here in PDF format. Note that although relevant information such as minerals produced, the name of the miner, and other technical information was included, there is no contact information available with the list.

Remember

Our due diligence service costs a fraction of what you may lose by not getting a due diligence done. We have seen dozens of importers from Asia and the Middle-East wasting hundreds of thousands of dollars for avoiding a due diligence fee. Don’t be one of them!

Brazilian Ore Production

Brazil is one of the world’s largest iron ore producers, and the largest iron ore exporter. Brazil’s proven iron ore reserves total 19.7 billion tons, which ranks Brazil as having the sixth-largest reserves worldwide and compares to proven world iron ore reserves of 306.5 billion tons.

However, taking into account the level of reserves in terms of the amount of iron contained in the ore, Brazil jumps to the number one position worldwide. This is due to the high level of iron contained in hematite ore (60%), mainly found in the state of Par, and in Itabirito ore (50%), mainly found in the state of Minas Gerais.

The internal and external markets for Brazilian iron ore have remained strong, in spite of economic crises (see chart below).

Iron Ore Miners In Brazil

Brazil is one of the largest iron ore-producing countries in the world. The iron content in Brazil’s iron ore is the highest than iron ore found in any location in the world. The iron ore found in Brazil is of two types: lump type iron ore and pellets type iron ore. The pellet type iron ore is in more demand in foreign markets than the lump type iron ore.

Major Iron Ore Mines and Iron Ore Mining

Iron ore mines are found in different locations around the globe. Iron ore mines are found in large numbers in the US, Canada, Australia, China, Brazil, and India. Iron ore mines are found in at least 50 countries around the world.

Leading Countries Producing Iron Ore

The countries that produce major iron ore in the world include China, Brazil, Australia, India, Russia, Canada, and US. The type of iron ore found in these countries varies from each other. The types of iron ore found include hematite ore, magnetite, bentonite, taconite ore, goethite, Itabirito ore, etc.
continue to read this article about iron ore mines

China is reshaping the Iron Ore market

China has become the dominant source of iron ore demand growth. About 98% of iron ore is used to produce pig iron, which is, therefore, the best indicator of iron ore consumption worldwide. In 1992, China produced 76 million tons of pig iron, surpassing Japan as the leading producing country in the world. In 2003, China produced more than 200 million tons of pig iron, almost 2 times the production of the second leading producer, Japan, at 82 million tons. China pig iron production grew at an average rate of more than 9% per year from 1992 through 2003.

In 2004, the three leading iron-ore-producing companies, located in Brazil and Australia, continued to invest large sums of money to increase production to satisfy Chinese demand. One estimate of output from all iron ore projects planned to start before 2009 indicates a production increase equal to more than one-third of the world’s 2004 estimated production.

The future of the global iron ore industry will depend primarily on how long China can continue its extraordinary growth. China is the worlds leading producer of iron ore on a gross tonnage basis but is only a distant third when considered on the basis of iron content. Growth in Chinese iron ore consumption is expected to continue, although not at the extraordinary rate seen between 2000 and 2004. Continued strong growth in Chinese iron ore imports to maintain steel production growth and offset decreased low-grade domestic ore production will be needed to meet China’s expected growth in steel consumption. This, along with Brazil’s development of downstream steel-producing facilities and India’s increased consumption of domestic ores, is expected to increase global demand for iron.

Sources: BNDES and U.S. Geological Survey, Mineral Commodity Summaries, January 2005