Article | Financialization of mining: intensification of

On July 15, 2021, the Companhia Brasileira de Alumínio (CBA) reached a new level in its history. CBA, which belongs to the Votorantim SA group – authentic representative of the Brazilian internal bourgeoisie – made its debut on the São Paulo Stock Exchange (B3) stock market with its initial public offering (IPO) .

CBAV3 (acronym for CBA’s shares on B3) was traded at the price of R$ 11.20 per share, below the initial claim, estimated at between R$ 14.00 and R$ 18.00. Given the result below expectations, only the initial lot of shares was traded. As a result, Votorantim continues to control 79% of the company’s shares.

Most of the shares were acquired by individuals and investment funds. Result: R$1.6 billion was incorporated into the company’s capital. It is worth noting that, on August 20, in a statement to shareholders, the board announces the investment of R$ 150 million in CDBs (Bank Deposit Certificates) with Banco Votorantim, of the same owner group.

Financialization of nature

This process is not an isolated fact, on the contrary, it is part of what can be called the financialization of nature, the process in which commoditized natural goods generate assets and transactions in financial markets. Financialization has multiple dimensions, notably the opening of capital in the stock market. This has been a recurrent practice in the mineral sector. In February 2021, Companhia Siderúrgica Nacional (CSN) completed the offering of shares in its mining parent company, raising a total of R$5.2 billion.

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This financialization is sold to the general public as a modern and stripped-down means of doing business. More and more people are progressively becoming familiar with the stock market and identifying themselves as investors, a process facilitated by the ideology of entrepreneurship.

However, on the concrete operating floor of financialized companies, environmental and labor conditions are deteriorating. An artificial business environment is created, detached from the real economy, in which the demand for dividend returns is incompatible with the real capacity for accumulation. Shareholders are always looking for the highest returns in the shortest possible time.

In response to pressure from shareholders, companies start to operate according to a logic with parameters given by the financial market, often ignoring the needs of the “mine floor”. The result in the real economy is neither fictional nor creative, it is the intensification of work and increased exploitation of resources.

It is this horizon of intensified exploration that points out the CBA, which has been undergoing substantial changes since 2016, when it split from the then Votorantim Metais (now Nexa Resources). To be valued in the financial market, the company needs to create the expectation of good results.

The aluminum sector helps in this regard, given its relevance as an important component of the means of energy production related to the conversion of the energy matrix, which is said to be sustainable. To this end, the company promises an audacious expansion, with the modernization of the industrial plant in the city of Alumínio (SP), expansion of the production of secondary aluminum (from recycling) and the Rondon Project for production in the state of Pará. investment of BRL 4 billion by 2025.

Impact for communities

The question is: what does this mean for workers and communities? As has been said, for both, unfortunately, the perspective is one of degradation.

Degradation of work, in the wake of the complete labor deregulation underway since Temer’s labor reform and the current (and scandalous) Provisional Measure nº 1.045/21 of Paulo Guedes, already approved in the Chamber of Deputies. Degradation of the environmental conditions from which the ore is extracted, which will suffer even more from the harassment of the CBA, which cannot frustrate the expectations of its shareholders. The company will have its work easier with the recent investments in the environmental licensing process.

To combat and resist the harmful results of this financial onslaught, the communities directly affected by the bauxite mining in Minas Gerais, Goiás and Pará cannot be alone. It is necessary to spread the understanding that the expansion of mining is part of a model, which involves the precariousness of work and the financialization of nature. As such, it is the model that needs to be fought together.

*Gustavo Soares Iorio is adjunct professor at the Department of Geography at the Federal University of Viçosa (DGE/UFV) and Tádzio Peters Coelho is adjunct professor at the Department of Social Sciences at the Federal University of Viçosa (DCS/UFV).

** This is an opinion piece. The author’s vision does not necessarily express the newspaper’s editorial line Brazil in fact.

Source: BoF Minas Gerais

Edition: Elis Almeida

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