LONDON, Sept. 26, 2019 /PRNewswire/ -- CRU was delighted to present at the Brazilian IBRAM 2019 conference and exhibition in Belo Horizonte in September 2019.
A team from our CRU Santiago, CRU São Paulo and CRU London offices spent a week with customers and business contacts to discuss global market challenges and opportunities in the Brazilian commodity sector.
Below are the hot topics that were repeatedly discussed during our time in Brazil
1. ESG was the top issue raised by mining leadership teams.
The dam failure at Brumadinho, in January 2019, caused shockwaves throughout the global and Brazilian mining sector. The Brazilian industry has a massive challenge to re-gain public support – and seems to be taking important steps to build that trust. For example, IBRAM announced it is to adopt the Towards Sustainable Mining (TSM) initiative developed by the Mining Association of Canada (MAC). There is also a growing recognition that the adoption of more transparent & robust ESG standards are needed to both attract talent to work in the mining sector and to retain as wide a pool of global investors as possible. Such efforts could be bolstered by a more coordinated communication strategy for the industry.
2. Global uncertainty has reduced demand growth impacting commodity prices.
Whilst 2018 was the year of "synchronized global growth" 2019 will be remembered as the year of "global uncertainty" with disappointing commodity consumption. However, during discussions there was limited concern that there would be a global recession in 2020 and even some optimism that trade war resolution could boost commodity prices next year. Most of our clients agreed with the CRU View that we are unlikely to see commodity prices break-out from their current malaise in 2020 and it is difficult to identify a compelling investment story for the sector today.
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