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Bahia Is The Second Largest Gold Producer In Brazil And May Receive Investments Of US$ 30 Million. New Gold Cycle Is Expected To Reach 350,000 Ounces Per Year By 2027.
Brazil is entering a new gold cycle, with at least ten new mining projects for the precious metal about to start legal production between this year and 2027. These ventures, distributed across nine states, represent a total investment of R$ 7.6 billion, mainly in Bahia. The 54% appreciation in the international gold price over the last three years has driven the emergence of these new projects in 2024. Gold exploration in Bahia promises not only to increase national production but also to strengthen the regional economy, consolidating the state as one of the main mining hubs in Brazil; currently, Bahia is the second largest gold producer in the country.
Bahia Is The Second Largest Gold Producer In Brazil
With this new gold cycle in Brazil, Bahia has become the second largest gold producer in Brazil, Jacobina is the 3rd largest producing municipality in the country and new projects are emerging in the State. One example is the new gold production area in Bahia being offered to private initiative by the Companhia Baiana de Pesquisa Mineral (CBPM) in the municipalities of Brumado and Aracatu.
On the other hand, Canadian Pan American Silver, owner of a complex of seven underground gold mines in the Bahian city of Jacobina, is investing between US$ 20 million and US$ 30 million to increase production, which was 195,000 ounces of gold in 2022. A new phase may reach 350,000 ounces per year in 2027.
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Bahia hosts the Fazenda Brasileira and Santa Luz mines, in the municipalities of Barrocas and Santaluz, both owned by Equinox Gold, self-declared largest gold producer in the Americas, which also operates in Minas Gerais and Maranhão.
Understand Why Bahia Is The Second Largest Gold Producer In Brazil
According to Manoel Barretto, technical director of CBPM, in a report, the Jacobina mine has been explored since the times of the Empire, but the tradition of large mines is evolving. They increase production with new technologies. CBPM maps and conducts bids for mining areas, which yield royalties of 2% to 6%.
Bahia is the second largest gold producer in Brazil, and the rise in gold prices is related to China, which since the end of 2022 has been buying gold at an unprecedented pace to bolster its foreign reserves and have an alternative to the US dollar.
The tensions between the two countries, combined with the wars in Ukraine and the Middle East, climate change, and the fear of new pandemics contribute to the increased global demand from countries, banks, and investors for the precious metal.
Gold Reaches All-Time High In 2024
In May, gold closed at a new all-time high and accumulated gains amid a rally driven by the Federal Reserve’s interest rate cuts on the horizon. Silver reached its highest levels since 2013 due to the metal shortage and reinforced demand in the Chinese market.
On Comex, the metals division of New York Mercantile Exchange (Nymex), gold deliveries in June closed up 1.34% at US$ 2,417.40 per troy ounce. Meanwhile, silver rose 4.63% to US$ 31.26 per troy ounce. During the week, gold increased by 1.79%.
The rise in gold prices signals that investors are anticipating interest rate cuts by the Fed later this year, but they may be uncertain about the prospects of curbing inflation without pushing the US economy into recession, also known as a soft landing. Some investors are buying into the hype around gold bars as prices rise, causing them to climb even higher.
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