💧 Water waste

Good morning! Today, the extent of Brazil’s water waste. The byproduct of illegal gold mining that is poisoning Brazil’s lands and rivers. And despite good Q1 GDP results, tougher times are on the horizon.

If you like our work and want to give us an extra boost, you can fill up our reporters’ coffee mugs. Supporters get exclusive perks! Find out more.

• Yesterday’s newsletter featured charts with visualization problems — we apologize. For a better visualization, check the web archive.

Brazil wastes a big chunk of its treated water

A new study by the Trata Brasil Institute, an advocacy group, finds that almost 38 percent of Brazil’s treated water is wasted each year. In 2022 alone, the country lost 3.6 billion cubic meters of water. Considering other issues, such as theft, operational losses, and measurement errors, Brazil did not account for the use of 7 billion cubic meters of water — the equivalent of 7,600 Olympic-sized swimming pools. 

 Why it matters. That amount of wasted water could have supplied 54 million Brazilians for a year. For comparison’s sake, there are 32 million people without access to treated water in the country.

Benchmark. Brazil’s water loss rate is 22 percentage points higher than that of developed nations, which hovers around 15 percent.

What they are saying. “These losses are a major challenge to achieving universalization [of water access], and they generate costs,” said Luciana Pretto, Trata Brasil’s executive president, in an interview. 

• “If we cut these losses to 25 percent by 2034, we would increase revenue by BRL 4.9 billion (USD 926 million); this gain could be reinvested in basic sanitation — for the construction of new stations and sewage networks.”

• This 25 percent rate is the maximum level of losses acceptable as established by an ordinance of the Regional Development Ministry in 2021.

Problems. For the environment, the high level of losses can generate excessive pressure on water supply sources and higher subsequent costs to mitigate the negative impacts of this activity. 

• Larger-than-necessary water capture and production also involve higher costs — in terms of chemical inputs and energy for pumping, as well as higher network maintenance costs.

Geography. The problem is worse in Brazil’s North and Northeast regions, which are the poorest and have the worst indicators for water service, sewage collection, and treatment. Furthermore, of the 100 municipalities in these regions surveyed for the study, only nine meet the standards of excellence in water losses.

Dirty gold

A new study suggests that roughly 127 tons of gold were produced in wildcat mining areas in Brazil between 2018 and 2022. However, Brazil’s imports of mercury — widely used in such ventures — did not increase in that span, suggesting that up to 185 tons of the toxic metal may have entered the country without any control whatsoever.

Context. Many artisanal and wildcat gold mines use mercury, mixing it with materials that contain gold to obtain an amalgam of the two metals. The mercury is then vaporized, leaving the gold behind. Much of this poisonous metal is then discarded in rivers, which serve as crucial sources of water and food for indigenous communities. 

By the numbers. According to the study, Brazil’s gold exports jumped from 35 to 96 tons a year between 2020 and 2022, while wildcat mining areas ballooned from 68,000 to 224,000 hectares. 

• Meanwhile, mercury imports fell from 67 to 15 tons in the same period. “The numbers don’t add up, and they strongly suggest that mercury is being illegally sold in Brazil,” said Larissa Rodrigues, the researcher behind the study.

 Why it matters. There is a scientific consensus that mercury causes brain damage, severe illnesses, and birth defects. Most of the world’s countries in 2013 signed a groundbreaking treaty to eradicate the use of mercury globally.

Widespread problem. More than 20 percent of the fish sold at supermarkets and fishmongers in six of Brazil’s Amazon states was found to be contaminated with mercury above the level considered acceptable by the World Health Organization (WHO), according to a 2023 study.

• The study concludes that illegal gold mining in the Amazon is to blame for the contamination levels.

Mercury poisoning is also to blame for humanitarian crises affecting some of Brazil’s most isolated indigenous communities.

Slowdown incoming?

The Finance Ministry celebrated yesterday’s GDP report, which showed that the economy grew at a 2.5 percent annual rate in Q1 — more than analysts expected. Still, the government is braced for a tough outlook from Q2 onward, mainly because of the side effects of the devastating floods in Rio Grande do Sul, Brazil’s southernmost state.

 Why it matters. Rio Grande do Sul is Brazil’s fourth-largest economy, being an important grain producer and manufacturing hub. These sectors “have been particularly affected” by the floods, leading to expectations of a slowdown, the Economic Policy Secretariat said in a statement.

Numbers of the tragedy. According to state officials in Rio Grande do Sul, more than 206,000 rural properties were affected by the floods. The latest report cites losses in production and infrastructure, with 34,000 families being deprived of access to potable water.

• According to the latest estimates, the state’s soybean production has lost 2.7 million tons. Poultry was affected, with almost 1.2 million birds killed. And the loss in pastures should also heavily impact beef and milk production.

• Card payment processing company Cielo suggests that retail sales were down by almost 17 percent in state capital Porto Alegre in the last week of May (in comparison to a year prior). 

Broader impacts. Many analysts have compared the damage of the Rio Grande do Sul floods to Hurricane Katrina, which ravaged New Orleans in 2005. They believe the tragedy could lower Brazil’s GDP growth in 2024 by 0.2 to 0.3 percentage points.

Other issues. Agribusiness has been hurt by extreme climate events — and not only in Rio Grande do Sul. Data from platform Frete.com shows that truck freights for agricultural cargo were down by 12.6 percent in Q1 (prior to the floods). The platform blamed the drop on crop losses across the country.

Forecasts. The median forecast for yearly GDP growth, as surveyed weekly by the Central Bank, has been parked at 2.05 percent for the past three weeks.

Quick catch-up

In a televised address prior to World Environment Day, Environment Minister Marina Silva said the government is drafting a strategy for climate change adaptation and will launch a national plan to face the climate emergency.

Brazil’s main stock index plunged to its lowest level in 2024, while the Brazilian currency lost almost 1 percent against the U.S. dollar. The latest U.S. job openings report indicates an economic slowdown, which has investors jittery.

A panel of Supreme Court justices unanimously decided that Senator Sergio Moro, a former star judge, must face trial for libel against the court’s longest-tenured member. Footage from last year showed Mr. Moro joking that the justice would sell rulings.

Deputy Finance Minister Dario Durigan said the government will call an extraordinary meeting of the National Monetary Council to greenlight a BRL 15 billion credit line to businesses affected by the Rio Grande do Sul floods. 

Regulators authorized health insurance companies to hike individual or family premiums by up to 6.91 percent in 2024. The decision comes at a time when companies have been unilaterally canceling thousands of health plans to save costs.

The post 💧 Water waste appeared first on The Brazilian Report.