MAC: Mines and Communities

Vale intends taking share in Belo Monte dam, Brazil

Published by MAC on 2011-04-27
Source: Reuters, Dow Jones, BBC News (2011-04-19)

It's one of the world's most controversial hydro projects

As a new chief executive takes over from the widely-criticised Roger Agnelli, the world's biggest mining company is close to taking a large stake in one of the world's most criticised hydro-electric schemes.

The Belo Monte dam, which would be the world's third-largest, was targeted by public prosecutors last year. On 25 February 2011, a federal court in Para suspended the issue of an environmental licence that would have allowed state utility, Eletrobras, to begin clearing land for the dam and the reservoir on the Xingu river.

The judge's ruling also prevents Brazil's national development bank BNDES from transferring funds to the Norte Energia consortium.

Last month, hundreds of indigenous Brazilians protested in Brasilia against the construction of Belo Monte. An indigenous leader  also delivered a petition opposing the project which was signed by more than half a million people.

Into the Vale of power

Vale's investment in hydroelectric power plants totals $880 million. The company also plans to build a 600 MW thermoeletric power plant in the state of Pará. See: http://en.wikipedia.org/wiki/Vale_%28mining_company%29#cite_note-autogenerated12-50

Vale accounted for 4.4% of the energy consumed in Brazil in 2005, and is already participating in eight hydroelectric plants,  7 of these located in the state of Minas Gerais.

The environmental and social impacts of one of these - the Tucuruí Dam in the Tocantins River (operational since 1984) are well documented. See: Environmental impacts of Brazil's Tucuruí Dam: unlearned lessons for hydroelectric development in Amazonia, Fearnside PM, National Institute for Research in the Amazon (INPA), 2001, Amazonas, Brazil. http://www.ncbi.nlm.nih.gov/pubmed/11148764

"Social Impacts of Brazil's Tucuruí Dam", Fearnside PM, Instituto Nacional de Pesquisas da Amazônia (INPA), 1999, Amazonas, Brazil. http://www.ncbi.nlm.nih.gov/pubmed/10501861

ESPAÑOL

Vale close to joining Amazon dam consortium

Reuters

19 April 2011

BRASILIA - Brazilian mining giant Vale is close to joining the consortium that will build the controversial $17 billion Belo Monte dam in the Amazon region, a source in the group told Reuters on Monday.

Map of the Belo Monte dam project
Map of the Belo Monte dam project. Source: Electrobras

Vale is likely to take over the 9 percent stake in the project that had been held by an energy subsidiary of meat-packing firm Bertin that announced its withdrawal from the project in February, the source said.

"The deal should be finished within 30 days," the source from the Norte Energia consortium said.

A spokesperson for Vale, the world's largest iron ore producer, said the company was still analyzing the project and had no further comment.

Vale appointed Murilo Ferreira this month as its new chief executive to replace Roger Agnelli, whose relationship with the government soured as politicians said the company does not do enough to invest in Brazil.

Vale is expected to gain the right to use a share of the anticipated 11,200 megawatts of power that Belo Monte will produce, making it the world's third-largest hydroelectric dam. The mining firm had been part of another consortium that lost out in the auction for the project a year ago.

The Brazilian government's decision to go ahead with the dam's construction has sparked protests in Brazil and abroad over the massive project's impact on the environment and native Indian tribes in the forest region.

The Norte Energia consortium building the dam is led by Brazilian state-controlled power utility Eletrobras. (Reporting by Leonardo Goy; writing by Stuart Grudgings; editing by Carol Bishopric)


Brazil's Vale Studies Entry Into Belo Monte Hydro Dam Project

Diana Kinch

Dow Jones Newswires

28 February 2011

RIO DE JANEIRO - Brazilian mining company Vale SA said Monday it is studying entering the group that will develop Brazil's major Belo Monte hydroelectric dam in the Amazon.

Vale is studying, from a technical and economic point of view, the possibility of participating in the Belo Monte consortium, said Vale executive director, exploration, Eduardo Ledsham. Conclusion of the study may take at least two more weeks, Ledsham said during an event in Sao Paulo.

Vale may replace Gaia Energia, the energy unit of Brazil's Bertin Group, in the Norte Energia consortium that is planning to build Belo Monte, a controversial 11,233 Megawatt dam project in Para state, north Brazil. Gaia, which held 9% of the dam project, pulled out of the project last week after Bertin decided to concentrate its energy-development efforts on building oil-based thermoelectric plants.

Bertin, which started as a meatpacker and is a major stakeholder in JBS SA, the world's biggest beef producer, is a developer of energy and transportation infrastructure projects.

Vale had previously participated in another investment group which lost the bid for the rights for the Belo Monte project, Ledsham said.

Brazilian steelmaker Gerdau SA may also be interested in taking Gaia's place in the Norte Energia group, according to local newspaper O Globo. The leading investor in Norte Energia is state-owned electricity generator Centrais Eletricas Brasileiras SA, or Eletrobras.

The Belo Monte dam, with an estimated investment cost of $17 billion, has been the subject of protests by environmental and indigenous-rights groups. The dam, which will be the world's third-largest when it begins operating in 2015, has also been targeted in lawsuits by public prosecutors who say environmental licenses were granted despite infractions.

On Feb. 25, a federal court in Para state suspended the issue of an environmental licence that would have allowed Norte Energia to begin clearing land for the dam and the reservoir on the Xingu river in the Amazon.

The ruling by judge Ronaldo Desterro of the federal court in Belem, Para state, stated that the group had not complied with environmental conditions imposed by Brazilian federal environmental agency Ibama.

The judge's ruling also prevents Brazil's national development bank BNDES from transferring funds to the Norte Energia consortium.

Norte Energia said that it will appeal the court's decision.

According to O Globo, the Brazilian government, a key shareholder in Vale, may be more inclined to keep Vale's current Chief Executive Officer Roger Agnelli in his job if Vale enters the consortium to develop Belo Monte. This follows months of speculation that Agnelli could be replaced by someone with more affinity with the government of Brazilian president Dilma Rousseff when his current mandate ends in late May.

Participating in Belo Monte wouldn't be detrimental to Vale in any way, Sao Paulo-based broker SLW Corretora said in a report to clients Monday.


Brazil judge blocks Amazon Belo Monte dam

BBC News

26 February 2011

A Brazilian judge has blocked plans to build a huge hydro-electric dam in the Amazon rainforest because of environmental concerns.

Federal judge Ronaldo Desterro said environmental requirements to build the Belo Monte dam had not been met.

He also barred the national development bank, BNDES, from funding the project.

The dam is a cornerstone of President Dilma Rousseff's plans to upgrade Brazil's energy infrastructure.

But it has faced protests and challenges from environmentalists and local indigenous groups who say it will harm the world's largest tropical rainforest and displace tens of thousands of people.

Judge Desterro said the Brazilian environmental agency, Ibama, had approved the project without ensuring that 29 environmental conditions had been met.

In particular, he said concerns that the dam would disrupt the flow of the Xingu river - one of the Amazon's main tributaries - had not been met.

His ruling is the latest stage in a long legal battle over Belo Monte. Previous injunctions blocking construction have been overturned.

The government says the Belo Monte dam is crucial for development and will create jobs, as well as provide electricity to 23 million homes.

The 11,000-megawatt dam would be the biggest in the world after the Three Gorges in China and Itaipu, which is jointly run by Brazil and Paraguay.

It has long been a source of controversy, with bidding halted three times before the state-owned Companhia Hidro Eletrica do Sao Francisco was awarded the contract last year.

Celebrities such as the singer Sting and film director James Cameron have joined environmentalists in their campaign against the project.

They say the 6km (3.7 miles) dam will threaten the survival of a number of indigenous groups and could make some 50,000 people homeless, as 500 sq km (190 sq miles) of land would be flooded.


Brazil: Indigenous tribes protest against Amazon dam

BBC News

8 February 2011

Hundreds of indigenous Brazilians have been protesting in the capital, Brasilia, against the construction of what will be the world's third biggest hydro-electric dam.

An indigenous leader delivered a petition opposing the project signed by more than half a million people.

Environmentalists say the dam in the Amazon river basin will harm the world's biggest tropical rainforest.

Brazilian Energy Minister Edison Lobao said construction would begin soon.

Mr Lobao said the population which would be affected by the Belo Monte dam would be compensated and resettled.

But indigenous leader Raoni said he was convinced the dam would bring "bad things" to his tribe's villages.

'There'll be war'

"We don't want Belo Monte because it will destroy our rivers, our jungle and our way of life," he added.

Another tribal leader said he and his tribe had not been given enough information about the project.

Ireo Kayapo said that if his tribe were to be driven from its land, "there'll be war and blood will be spilled".

Wearing their traditional headdresses, tribal leaders delivered a petition signed by more than 600,000 people demanding the government scrap the $10bn project.

Licences still have to be granted for the actual building of the plant, but last month Brazilian environment agency Ibama gave the go-ahead for the clearing of the land at the site of the planned dam.

The government says the Belo Monte dam is crucial for development and will create jobs, as well as provide electricity to 23 million homes.

The 11,000-megawatt dam would be the biggest in the world after the Three Gorges in China and Itaipu, which is jointly run by Brazil and Paraguay.

It has long been a source of controversy, with bidding halted three times before the state-owned Companhia Hidro Eletrica do Sao Francisco was awarded the contract last year.

Celebrities such as the singer Sting and film director James Cameron have joined environmentalists in their campaign against the project.

They say the 6km (3.7 miles) dam will threaten the survival of a number of indigenous groups and could make some 50,000 people homeless, as 500 sq km (190 sq miles) of land would be flooded.

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