LATIN AMERICA SPECIAL — Brazil emerges from political

Just emerging from a political crisis that saw its president, Fernando Collor, resign under accusations of corruption, Brazil is now concentrating on controlling its rampant inflation rate.

But Collor’s overall policy to privatize and modernize the Brazilian economy continues under interim president Itamar Franco, who has promised to accelerate economic integration among the Mercosul countries of Argentina, Brazil, Paraguay and Uruguay.

In the 1980s, when the gold price was much higher than today, Brazil experienced a major gold rush sparked by discoveries in weathered greenstones. As a result, gold production, mainly from garimpeiro’s mining alluvial deposits and shallow orebodies, jumped from about 30 tons in 1980 to 100 tons in 1990.

Since then, production by garimpeiros has declined sharply while the formal mining sector has increased its output.

The only Canadian producer that has made a substantial capital investment in Brazil in recent years is Toronto-based TVX Gold (TSE). The company has a stake in three gold mines there, including the low-cost underground Crixas mine, a 50-50 joint venture with a Brazilian affiliate of Anglo-American. For the nine months ended Sept. 30, 1992, TVX’s share of Brazilian gold production reached 110,000 oz. Cash costs dropped to US$183 per oz., compared with US$217 per oz. for the same period in 1991.

In 1991, Brazil’s mineral exports were worth $3 billion, 85% of which was derived from the country’s iron ore deposits.