Neoliberalism and financialization of the Amazon



The Amazon, its mines and its lands, are part of the global process of financialization

The 1990s saw a contradictory set of state economic intervention policies in the Brazilian Amazon. The economic crisis that took hold at the end of the military regime, marked by the rise in the external public debt, the gradual bankruptcy of the Brazilian State and the crisis of economic stagnation and hyperinflation, led to the resurgence of State actions regarding policies for the exploitation of mineral and energy resources. and agricultural and logging lands in the region, which did not imply the extinction of tax waiver policies and/or public financing that fundamentally benefited big capital centered on these activities.

As Professor Otávio Ianni (1979, p. 237) noted quite a bit ahead of time, “what prevailed in the extensive capitalist development that took place in the Amazon was the policy of producing to export”. After the failure of the military regime, fundamentally economic failure, the deepening of national imbalances in the balance of payments, started a double logic on the vast national territory: the expansion of agricultural production for export and the intensification of mineral extraction efforts. At the turn of the 1980s, the Amazon became the largest space consistent with the economic standard that the decadent military regime bequeathed to Brazilian restricted liberal democracy.

In the second half of the 1990s, the neoliberal policies adopted by the Brazilian government involved several structural changes, including the trade liberalization process, the exemption of exports and the reduction of state participation in the economy, which culminated in the privatization of several state-owned companies, including Companhia Vale do Rio Doce in 1997. The privatization of the largest mining company in Latin America had and still has a series of repercussions on the region, with notable national repercussions.

Allied to the process of mineral exploration and privatization characteristic of the period, one can also observe the expansion of the land market in the Amazon. The text that follows explores the dynamics that we consider Siamese: the financialization of the Brazilian political economy, added to the growing commodification of the Amazon region, subordinated to rent-seeking rules and land concentration. To deal with these elements, we will use already established authors, such as the aforementioned Otavio Ianni (1979), but we will also have the support base of the intellectual work of Professor Francisco de Assis Costa (2012), one of the most lucid contemporary authors with regard to the analysis of the “Amazon problem”.

The economic logic from the 1990s onwards is established from four fronts of capital action in line with the Brazilian State: (i) first and, much or more neglected by the analyses, it refers to the power inherited by the former state-owned Companhia Vale do Rio Sweet and granted to the national and international private appropriation sectors, especially the huge transfer of land to private control and speculative gains from the manipulation of these lands; (ii) land appropriation movements by segments of large-scale grain production, something that will become visible in land concentration movements; (iii) credit incentives, from state banks, to large producers and large estates, intensifying the ability to purchase and concentrate land; (iv) finally and more than central, this set of movements establishes the economic condition of financialization of the Amazon, including the use of supposedly progressive tools, but whose basis is the appropriation of land, the spoliation of nature and the destruction of cultures local, the best-known example is the various bonds and derivatives for environmental exploitation or protection (REDD+, among others).

The 2000s represented a period of strong expansion in the production of commodities in Brazil, driven by the significant increase in international prices (absolute and relative) related to the China-effect and other factors such as cost, exchange rate and financialization (TRINDADE & OLIVEIRA, 2017). In the case of commodities minerals, the international flow has developed a lot with the increase in Chinese demand since the beginning of the last decade, maintaining high growth rates despite the 2008/2009 crisis.

Following the momentum of the strong appreciation of commodities minerals in the international market, in the 2000s, iron ore exports from Pará showed a growth rate of 7,4% per year between 2000 and 2010, with the value of exports jumping from US$ 681 million to a significant US$ 6.900 billion, with its average price (dollar/ton) reaching an increase of 91,23% per year, as shown in the chart below.

Export and Export Value of Iron Ore by the State of Pará (1997 – 2015)

Source: SECEX/MDIC, AliceWeb System.

Taking the period from 2005 to 2015 as a reference, the volume exported more than doubled, reaching a peak of 123,7 million tons in 2015, which represented a growth of 10,3% per year in the period. With exponential growth since 1997 (year of privatization of CVRD), in February 2011 the international price of iron ore reached its highest level: US$ 187 dollars/ton. dry metric, but even though it has been showing fluctuations in the last ten years, they remain above US$ 100 dollars (Source: Index Mundi. Access:

While the Chinese are mining iron ore with increasingly lower grades and with high production costs, currently around US$ 100/ton. In Brazil, the raw material is mined at an average of US$ 20 per ton, and in the mines of Carajás, ore with an iron content of 66% can be mined at US$ 15/ton (TRINDADE & OLIVEIRA, 2011; CRUZ & TRINITY, 2021). Considering the relationship between the Chinese mines (mines with lower productivity and quality) and the Carajás mines, it is only possible to estimate, only approximately, the high differential income that the Vale Company appropriates. The supplementary income can be seen as the differential between the production costs of the Carajás mines and the production costs of the Chinese mines, so considering the 2010 values ​​presented by Vale referring to Carajás, we have a difference of US$ 85.

In the case of commodities minerals, what really affects the offer is the existing productive capacity and the production costs, thus, given that the productive capacity is established by the natural limits of production (mineral volume), oscillations in the tendency of demand growth can leave the mining industry mining with idle capacity, implying the need for cost reduction. On the other hand, an unexpected and accelerated growth in demand can raise market prices to the point of making it feasible to operate mines with high or increasing extraction costs and for a relatively long period, generating differential incomes for mines with greater productivity.

These characteristics establish three notable and problematic movements: (i) first, the Amazonian mineral extraction plants are very low cost, not due to technological aspects, in the first place, but due to the characteristics of extraction and ore content, thus the mines they can be exploited until their exhaustion, as they will always have costs far below the average of international price fluctuations; (ii) Brazilian economic (fiscal and environmental) deregulation makes the Amazon an expansive exploration center, and extractive capacity becomes spoliating and degrading nature to the limit of natural exhaustion; (iii) these elements add up to the most notable condition of recent years, which are the rentier gains, the production base becomes only the nexus for increasing and short-term transfers of dividends to be passed on to the company's controlling shareholders.

The financial market was the great beneficiary of the privatization of Companhia Vale do Rio Doce, its shares began to be traded in 2000 on the New York Stock Exchange (NYMEX), a fact that completely changed the character of the company, which became integrate the process of financialization of commodities. With the rise in prices, iron ore began to occupy more and more space in the Brazilian trade balance. The dividends distributed by Companhia Vale are among the largest distributed among the international "players": between 2011 and 2022 the mining company distributed to the controllers, in the form of dividends and JCP (interest on own capital), around 132 billion reais (see :

The rentier logic that drives mining in the region remains based on the use of comparative advantages resulting from privileged access to natural resources at low cost, credit and tax facilities, high capital/labor ratio and low technological diffusion. Once the global dynamics of accumulation and financialization of commodities minerals, standardized industrial iron mining procedures do not need to interact (except in specific situations) with other productive arrangements and with local and regional diversity, reinforcing income concentration and territorial inequalities. The persistence of industrial mining (not just iron ore) on a primary-export basis does little to internalize lasting economic, social and environmental dynamics and, in this sense, does not constitute a sustainable vector of long-term local and regional development.

It should be emphasized that the capitalist controllers receive extraordinary profits as a form of perpetuity for the mining advantages that they have since the granting of the right to mine by the State (after privatization), since the subsoil becomes a mere space for the enjoyment of a privately appropriable asset, however much the legislation establishes mining as a public concession. Thus, the capitalist mining controllers appropriate the differential income made possible by the superior quality mines embedded in the Amazonian subsoil, which explains the large volume of dividends distributed to the international controllers, the basis of the current process of financialization of capitalism, where the Amazon, its mines and their lands are at the center of the world process.

An aspect that must be emphasized is that the level of this supplementary profit is given by the difference between individual productivity and average productivity, and the price of production that prevails within the mineral industry. However, this natural force is not the source of added wealth (additional value) but only its natural basis, and the circulation of capital is what provides this process, given the growing appropriation and transformation into an element of the reproductive process of new deposits mineral grades, ease of exploration of the mineral lode and location of the mine in relation to the main centers of international demand.

Concomitant with the financialization of the subsoil, whose appropriation becomes almost visceral, one observes the commodification of land on a large scale, with major repercussions on Brazil and the world.

*Jose Raimundo Trinidad is professor of economics at the Institute of Applied Social Sciences at UFPA. Author, among other books, of Six decades of state intervention in the Amazon (Paka-armadillo).



TRINDADE, José Raimundo Barreto and OLIVEIRA, Wesley Pereira de. Primary productive specialization and the environment in the recent period in the Amazon. In: New NAEA Notebooks, Vol. 14, N. 02, 2011. Available at:

TRINDADE, José Raimundo Barreto and OLIVEIRA, Wesley Pereira de. Primary-exporter specialization pattern and dependency dynamics in the period 1990-2010, in the Brazilian economy. In: FEE tests, Vol. 37, No. 04 (2017). Available in:

CRUZ, Adejard Gaia and TRINDADE, José Raimundo Barreto. Paraense Amazon: two centuries of extractivism and primary-export specialization. In: Journal of Regional, Urban and Labor Economy, Vol. 10, N. 02, 2021. Available at:

IANNI, Octavio. Dictatorship and agriculture. Sao Paulo: Brazilian Civilization, 1979.

COSTA, Francis of Assisi. Elements for a political economy of the Amazon. Bethlehem: NAEA, 2012.


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