MAC: Mines and Communities

Mining's threats to Brazil's forest and biodiversity

Published by MAC on 2013-02-19
Source: Statement,, Canadian Star

Two proposed new iron ore mines threaten disaster for biodiversity along Brazil's Atlantic coast, acccording to environmentalists.

In a separate development, Canada's Belo Sun has been stalled in advancing its major gold project in Para. The federal government has reportedly warned that no mining licence should be granted without prior environmental impact studies and consultations with the local indigenous people.

ENRC to devastate the largest Brazilian biosphere reserve

Article by Ação Ilhéus (Action Ilhéus), Brazil (reproduced in

14 February 2013

The "Porto Sul" project was initiated on March 3rd 2007 with a letter of intent signed between the Government of the State of Bahia - Brazil and the Bahia Mineração Ltda (BAMIN - a subsidiary of London-listed ENRC in Brazil).

This project includes the construction of a railroad (FIOL) which eventually should connect the town of Ilhéus, located on the coast of Bahia state, to the town of Figueirópolis in the interior in the state of Tocantins. Besides the railroad, the project is to include:

The iron ore is to be extracted from the mine located in the state of Bahia ( Caetité ) and will be transported to the private port terminal located in the vicinity of Ilhéus by rail. The owner of the mine is BAMIN, a subsidiary of Eurasian Natural Resources Corporation (ENRC). During the first stage, the amount of iron ore to be exported as pellet feed is 25 million tons / year.

Originally, the private port terminal was located in "Ponta da Tulha", region located 20 kilometres north of Ilhéus.

On November 8th 2010, IBAMA (Brazilian Institute of Environment and Renewable Nature Resources), after analyzing the EIA (Environmental Impact Assessment) issued by BAMIN , issued a technical advice (186/210) with the statement that the preliminary license should not be granted for the selected location and suggested transforming this special Atlantic Forest area into a protected area because of its environmental significance.

A few months later, the State of Bahia issued a new decree (# 12.724 from April 11th 2011). With this decree a new area of 48,333,024.72 m2 was declared as public utility, to be expropriated for the construction of the industrial and storage area of "Porto Sul". The new location, called Aritagua, is located about 5 kilometres south of the original location, Ponta da Tulha.

It is obvious that the impact which led IBAMA to deny the preliminary license for the first location also fully applies to the Aritagua area. Furthermore, the initial area of 17,713,175.48 m2 would now be trebled.

On November 25th 2011 a new decree (# 13.468) was issued with the objective of reducing the area from 48,333,024.72 m2 to 22,686,830.7686 m2. Finally, on April 13th 2012 a new decree (# 13.918) was issued by the State of Bahia and the final area to be attributed to the Complex Porto Sul is now 18,600,000.00 m2.

It is hardly necessary to emphasize the importance of the Atlantic Forest, which was designated by UNESCO as one of the Earth's five most important biodiversity hotspots and the largest biosphere reserve, making it one of the world's highest priority regions for conservation.

It is obvious that the transport, storage treatment and shipping of iron ore is absolutely incompatible with the nature of our planet's largest biosphere area and would, if built as planned, lead to the destruction and devastation of the first biosphere reserve in Brazil.

It should be also mentioned that the new selected area is located within the Environmental Preservation Area (EPA) and, therefore, inside the Atlantic Forest Biosphere Reserve.

A new Study of the environmental impacts was issued by BAMIN / DERBA in August 2011. Most of the information included in the new study is based on the former study done in August 2009 for the area of Ponta da Tulha. Most of the habitants of the Aritagua and Juerana Village area never saw any biologist or geologist performing a study in this area.

On February 1st 2012 IBAMA issued a report pointing out the weakness of the Study issued by BAMIN/DERBA. It noted several errors, inconsistencies, and the lack of sufficient information.

In May 2012 BAMIN / DERBA replied to IBAMA's questions with a 1000 page publication. The answers given by BAMIN / DERBA are mainly superficial, of poor quality, and not the results of a serious study.

Finally, on February 1st 2013 IBAMA has issued the preliminary authorization (Parecer # 09/2012) for the former study of the port complex. IBAMA's decision is based on a superficial study: all answers from BAMIN / DERBA have been accepted without serious objection, and it is obvious that no more intensive work was involved by the staff of IBAMA.

Moreover, a new project has been announced by a company called South America de Metais(SAM) which is a subsidiary of Honbridge Holdings Ltd. The mine is located in Grão Mogol (in the north of the state of Minas Gerais) and belongs 100% to Honbridge Holdings. The iron ore is supposed to be transported by a 480 kilometre slurry pipeline to the Aritagua area.

The project, called Vale do Rio Pardois, is managed by Votorantim Novo Negócios, which was owner of the mine before selling it to Honbridge Holdings on March 5th 2010. The expectation of SAM is to export 25 million tons of iron ore pellets using the Porto Sul Complex. Besides iron ore, 50 million m3 of water will be transported within the slurry pipeline and separated from the iron ore in Aritaguá. The return of this water to Grão Mongol is not foreseen. The EIA was issued in June 2012 and a public discussion took place on January 24th 2013 in Ilhéus, undermining SAM's claims.

The Non Governamental Organization AçãoIlhéus (Action Ilhéus) is actively working against the Porto Sul Project, defending nature and communities' rights, especially at Juerana Village, which has a population of about 700 people and will be severely affected by the project.

NGO AçãoIlhéus spokesman, Mr. Ismail Abéde, says that the most critical risks of the project are:

Belo Sun drops 7% as doubts over $1 billion Amazon gold mine creep in

Frik Els

7 February 2013

Belo Sun dropped by as much as 7.5% on Thursday after Brazil's federal authorities ordered further environmental and social impact studies for the company's Volta Grande project in Pará state.

According to reports Brazil's Federal Public Ministry (MPF) this week sent two recommendations to the Secretary of Environment of Pará (SEMA) to warn that no license be granted without prior environmental impact studies and consultations with the local indigenous people.

While these studies are not out of the ordinary in the licensing process for this kind of project, Volta Grande, Brazil's largest gold mine in development, has attracted intense scrutiny from Brazil's federal authorities recently.

In September - also after reports about a federal investigation into the project that found inconsistencies in the environmental assessment - Toronto-based Belo Sun withdrew and then quickly re-instated a $50 million financing deal provoking bewilderment from investors.

The $366 million company has lost close to 19% of its value of the Toronto stock exchange over the last month perhaps indicating waning confidence in the timetable set for the project.

Belo Sun was hoping to receive a preliminary licence from SEMA-PA, the competent permitting authority, this quarter.

The market cap losses come despite Belo Sun's announcement in December expanding the resource at Volta Grande to 4.1 million ounces of gold (and another 2.8m oz inferred) in December.

The $1 billion project is now in the definitive feasibility stage and construction start-up as early as the third quarter of the year is envisaged.

Belo Sun owns 100% of Volta Grande and increased its property position from 195 sq. km to 1,305 sq. km a year ago.

The controversial mine in the Volta Grande do Xingu area is to be built near lands of the indigenous Xingu people and 14 km away from the Belo Monte hydroelectric dam, an equally environmentally sensitive project now under construction.

Brazil wants more research on Amazon gold mine before Canadian company proceeds

By Tanya Talaga, Queen's Park Bureau

The Canadian Star

14 February 2013

Brazilian government urges more studies on how Belo Sun Mining Corporation's Volta Grande venture will affect the environment and indigenous peoples.

The Brazilian government wants to see more research on a massive gold-mining project near the Amazon River before the Canadian firm behind it goes ahead with developments.

Brazil's Federal Public Ministry has asked state authorities to obtain more information on how the Belo Sun Mining Corporation's Volta Grande venture, one of the largest gold mining projects near the Amazon, will affect the ecologically sensitive area and the indigenous people living there. It also wants details on any effects the project will have on the nearby Belo Monte dam, the third largest hydroelectric project in the world.

The Amazon River basin is one of the most precious ecosystems in the world. Deforestation and development in the area is a cause of global concern.

The Volta Grande is 60 kilometres southwest of the city of Altamira in the northern Para state. Belo Sun controls the mining and exploration rights covering 1,305 sq. km. The Toronto-based firm says it has already invested $100 million on exploration, purchases and improving the area by building a school.

Attorneys for the federal ministry argue the company should not get the licence it needs to proceed until FUNAI, a government body that safeguards the interests of indigenous people, puts forward terms of reference for studies on how mining will affect those living there. They also want broader public hearings, according to a statement released by the ministry last week.

And they want FUNAI to approve it all before the licence is granted, the statement said.

The Volta Grande is being constructed near the controversial Belo Monte dam, which diverts part of the Xingu River, a tributary of the Amazon, into an artificial canal. The Brazilian government says the dam is needed to feed Brazil's growing energy needs but the Belo Monte has been the subject of decades of protests and legal challenges.

International environmental groups fear the combined effects of the dam and the mine on the area, and are applauding the steps Brazil is taking.

However, Belo Sun CEO Mark Eaton told the Star that the company has already submitted its social and environmental impact reports to the state government and they were accepted. Public hearings have already taken place and the company has followed all the proper protocols and procedures, Eaton said.

"The (federal ministry) has requested more consultation and studies to show we won't have an impact on water levels or on indigenous communities - basically that everyone is doing their jobs," Eaton said. "But nowhere did they say we shouldn't have our operations permitted or get our licences."

Permits are issued at the state level but the federal government agencies act as watchdogs, providing a further safeguard to the public interest. Eaton said the requirements his company has been asked to fulfil are not out of the ordinary.

"We have good support in the local community. We are doing everything we can to the highest standard. This is a poor area of Brazil, they would welcome the development," he said.

The project will not have an impact on the Xingu River, he said. "It is up on a hill, away from there," Eaton said. He dismisses claims by "bloggers" and environmental organizations that the river was being dammed so the mine could proceed as "ridiculous noise."

"It is one of those frustrating things. You feel like you are fighting against ghosts with blog posts," he said.

Eaton said he does not believe the ministry requests will delay Belo Sun. "But I hesitate to say that."

Environmentalist groups International Rivers and Amazon Watch praised Brazil for demanding more evaluations and putting the brakes on a project they say will "heap further tragedy" on the communities near the Belo Monte dam. Amazon Watch is a non-profit agency based in California and International Rivers operates on five continents, trying to protect threatened bodies of water.

"The public ministry is a constitutional watchdog authority within the Brazilian federal government. They have discovered the environmental assessment is completely lacking information. It has to be evaluated beside the dam," Amazon Watch's Christian Poirier said from Paris.

"If it moves into the hands of the federal agency, it will definitely slow down the licensing process. This is everything that Belo Sun does not want. They want to stay in the hands of the state agency for quick approval."

The Arara and Juruna Indians, whose ancestral homeland is along the Xingu, will be affected by all of the construction, he said.

"The authorities say they need to monitor the impact of Belo Monte for six years," he said. "During that time, we can't see another megaproject in the area. It just isn't fathomable."

Authorities Reject Belo Sun Mining Project in Brazilian Amazon

Amazon Watch & International Rivers press release

13 February 2013

Public Ministry warns against licensing for Canadian mining company

Altamira, Brazil - Brazil's Federal Public Ministry (MPF) stunned Canadian Belo Sun Mining Corporation last week when it issued recommendations warning against the issuing of environmental licenses for a gold mine in the Brazilian Amazon. The MPF cited serious irregularities including inadequate socio-environmental impact studies and the lack of consultation with indigenous communities in the region. The move raised concerns among the company's investors, prompting stock to drop 7.5% immediately following reports on growing scrutiny from Brazil's federal authorities.

The MPF's petition to the environmental agency of Pará State (SEMA) is the latest blow against Belo Sun's gold mining ambitions in the Amazon. Controversy over the proposed mine has cost the $366 million company nearly 19% of its value in the Toronto stock exchange over the last month, casting doubt over its ability to maintain a project timetable that would break ground in late 2013.

"We applaud the MPF for taking vigorous steps to uphold Brazilian environmental and human rights legislation, putting the brakes on a project that would heap further tragedy on the communities already faced with the disastrous Belo Monte dam," said Christian Poirier of the environmental and human rights organization Amazon Watch. "Another welcoming sign is that Belo Sun's investors have responded accordingly, pulling their money from this toxic mine."

Belo Sun's $1 billion "Volta Grande Project" would be the largest gold mine in Brazil and sit directly adjacent to the controversial Belo Monte dam complex on the Xingu River, threatening major environmental and social impacts in a region already seriously affected by the construction of the world's third largest dam.

The construction of the Belo Monte dam aims to divert 80% of the Xingu River's flow into an artificial canal, leaving its "Big Bend" with less water than in its history. Directly downstream of the dam, Belo Sun seeks to install the gold project in the Xingu's dried riverbed a mere nine kilometers from an indigenous territory, causing further damage to the rivers, forests, and communities of an environmentally exhausted region.

"Mining companies are among the largest shareholders and consumers of hydropower in the Amazon, consuming nearly 20% of all industrial electricity produced in Brazil," said Zachary Hurwitz, Policy Coordinator at International Rivers, an environmental organization tracking Brazil's dam expansion in the Amazon. "It's a double hit to an already weakened ecosystem."

The MPF recommendations state that no license should be conceded without first conducting rigorous environmental impact studies and constitutionally mandated consultations with indigenous people living in the region who are threatened with cumulative impacts from both mega-projects. Belo Sun's mine is almost entirely located within the Belo Monte dam's area of direct impact with a concession spanning over 1,305 km2 and containing an estimated 4.1 million ounces of gold, for which 37.8 metric tons of earth and rock will need to be excavated over 11 years.

According to the MPF, any evaluation of the mine's viability must "be assessed based on whether the fragility imposed by the Belo Monte dam to the Big Bend of the Xingu permits the presence of another large project in the region, especially one that provokes people's displacement, the intensive use of polluting substances, and recognized environmental impacts."

The MPF's recommendations mirrored those of Brazil's Socio-Environmental Institute (ISA), which sent SEMA a technical opinion in late January calling for a "declaration of infeasibility" of the Belo Sun mine.

"The population of the Xingu's Big Bend is already living with uncertainties caused by the reduced flow of the river, resulting from the construction of Belo Monte. They should not have to live with the installation of a large mine and with the imminent risk of accidents that further pollute an already weakened environment," said Biviany Rojas, an attorney at ISA. "What type of extreme situation is the Brazilian State willing to impose upon the indigenous and riverine people of the Xingu in exchange for energy and gold for private companies?"

At public hearings organized by Belo Sun, the company repeatedly argued that its gold mining "will not interfere with the reduced flow of the Xingu," and that they "have no influence over this." Critics have argued that SEMA cannot accept these claims, demanding instead that detailed studies be conducted to measure the accumulated impacts of both the mega-dam and planned mine.

Carrying out such studies would require obtaining constitutionally mandated free, prior, and informed consent from indigenous peoples, which would further delay the project's calendar and could cause investors to punish the company and undermine its chances of beginning operations this year.

Christian Poirier, +33 6-2305-9435
Caroline Bennett, +1 510-281-9020 x306
Zachary Hurwitz, +1 510 848 1155 x313

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