Brazil gold exports

Mining Org Claims Gold Export Bureaucracy in Brazil Fuels Illegal Market

Nov, 10, 2023 Posted by Gabriel Malheiros

Week 202341

The bureaucratic procedures adopted by the Brazilian Federal Revenue for gold exports fuel the growth of the illegal market, causing losses for miners and regional economies in Mato Grosso. This concern was raised by Roberto Cavalcante, the CEO of the Institute “Somos do Minério,” who asked for a prompt resolution.

Since March, miners have been facing challenges with releasing their shipments due to a stricter policy implemented by the federal government. Consequently, mining towns like Poconé and Peixoto de Azevedo are experiencing reduced revenue from mining activities and rising unemployment in these regions.

Cavalcante explains that the delays are leading to the expansion of the informal market, where gold from the state is exported “at a dirt-cheap price” to other countries.

“The negative consequence of this measure is the disruption of the formal gold market and the increase in informality within this sector, leading to increased smuggling into Bolivia or Venezuela due to the significant delays at federal customs. This is an undesirable, negative consequence that authorities need to acknowledge to put an end to the prolonged clearance time for shipments to Guarulhos Airport. Certainly, strict oversight is necessary, but some practicality is required,” he emphasized.

The CEO elaborated that the government’s stricter regulations initially aimed to dismantle illegal gold exports from within the Legal Amazon, a measure he deems correct and supported by those operating in the formal market. However, this action impacts the release of ore sales to financial institutions that handle the export of the product to other countries, known as DTVMs.

He noted that these institutions lack the working capital to endure the prolonged analysis period imposed by the Federal Revenue, which can take up to 40 days for export clearance.

The impact of this situation is felt in mining municipalities, especially among cooperatives and small-scale miners. Cavalcante believes that if the problem is not resolved, these towns could face financial collapse, as many rely on gold exports for over half of their budgets.

“In the state, specifically, we have the Cuiabá Lowland, with municipalities like Poconé and Nossa Senhora do Livramento, the Peixoto Valley, and other cities facing difficulties, especially in their local economy. The impacts are highly negative because this paralysis in acquisitions is first depreciating the price of gold, which is currently in the range of R$240 to R$250, when it should ideally be between R$310 and R$330, for instance,” he explained.

“People are forced not to sell, leading to job layoffs. In Poconé alone, for example, there are 3,000 direct jobs, which will negatively impact Poconé’s economy, which depends 90% on gold mining,” he added.

A group of politicians from the state, led by Senator Jayme Campos and State Deputy Janaina Riva, visited the Federal Revenue this week to demand expeditious actions. They urged the government to set a timeline for issuing the necessary documentation, enabling miners to sell gold and DTVMs to export it.

Source: Olhar Direto

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