A Canadian company is one step closer to building a controversial gold mine in the Amazon rainforest, after its study on how the development would impact remote Indigenous people was approved by Brazilian officials, the CEO of Belo Sun Mining told CBC News.
FUNAI, the Brazilian government body responsible for handling issues related to Indigenous people and their land rights, has approved the company’s consultation plans for the Volta Grande gold project, said CEO Peter Tagliamonte.
The approval is the most recent salvo in a series of long-running disputes between different Brazilian authorities and the Toronto-based company over what Belo Sun calls the largest undeveloped gold project in Brazil.
The proposed project in one of Earth’s most biodiverse regions has long been a flash point for environmentalists.
They say the proposed mine in northeastern Para state is likely to contaminate the rainforest with cyanide and other toxic chemicals from its tailings dam — a problem that has ravaged other Brazilian mining regions in recent years, killing hundreds of people.
“We have the risk of contamination of the river with heavy metals and cyanide,” Rosana Miranda, a Sao Paulo-based campaigner with the environmental group Amazon Watch, said in an interview.
She said the company could be “prompting the last stages of ecocide” in the Xingu River, a tributary in the world’s largest rainforest.
Belo Sun maintains it will operate to high environmental standards, pay more than $170 million in taxes and create hundreds of good paying jobs for local people in the traditionally poor region.
“The Volta Grande Project will be a very positive economic driver,” Tagliamonte said via email. “I have been involved with building and operating a number of mines and have seen first-hand how well-paying jobs positively impact a region.”
The project is “fully permitted,” Tagliamonte said, and the company is in the process of consulting with local Indigenous groups. In-person meetings won’t recommence until it’s safe to do so, given Brazil’s dire COVID-19 situation, he added.
Consultations suspended for COVID
Last month, FUNAI said consultations with local residents about the project could go ahead, after the agency approved the company’s study on how the mine would impact Indigenous people living nearby.
FUNAI’s initial approval for consultations came despite protests from other Brazilian government agencies, including the federal Public Defender’s Office, who said in-person meetings aren’t safe given the pandemic.
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More than 300,000 Brazilians have died from COVID-19, the second highest death count globally after the U.S., and hospitals across the Amazon have faced oxygen shortages. Morgues have filled beyond capacity.
“There are so many red flags here I can’t even count them,” said James Bosworth, a political risk consultant with the firm Hxagon, who advises companies doing business in Latin America.
That FUNAI authorized a company to conduct public consultations with remote Indigenous communities in the middle of a pandemic is “not a good sign,” Bosworth said in a phone interview.
The approval shows how regulators responsible for safeguarding Indigenous rights and the environment have been undermined by Brazil’s far-right President Jair Bolsonaro, he added.
Bolsonaro is keen to open the Amazon to more farming, mining and other business interests. Bosworth said FUNAI is run by one of the president’s supporters.
Tagliamonte stressed Belo Sun will only hold consultations in Indigenous communities where residents have been fully vaccinated and meetings will only happen when they can be conducted “safely following best-practice health-and-safety protocols.”
The company has a good relationship with local Indigenous communities, he said.
If Belo Sun’s consultations are approved, Tagliamonte said, it will take about two years to build the mine. He could not give a timeline on how long the consultations are expected to last.
The proposed mine site contains proven and probable reserves of 3.8 million ounces of gold, according to Belo Sun, worth more than $8 billion at current prices.
The company’s stock is traded for less than a dollar on the Toronto exchange, indicating that a decade since it was first proposed some investors aren’t convinced the project will be viable.
Water contamination fears
Biviany Rojas Garzon, a lawyer working with the Brazilian campaign group Instituto Socioambiental, said environmental impact studies of the proposed mine have shown plans for the tailings dam to store waste don’t take into account seismic activity in the region.
“The dam is very likely to fail and tailings can reach the Xingu River in just seven minutes,” Garzon said via email.
The proposed dam would be 44 meters high, according to a technical analysis of the project commissioned by environmentalists. It would contain more than 35 million cubic meters of mine tailings, including cyanide used to extract the gold — enough toxic material to fill 14,000 Olympic-sized swimming pools.
“A leak of that magnitude would mean the death of the river,” said Miranda from Amazon Watch.
Even if the dam does not leak, Miranda asked, “What will happen to all the waste after two decades,” when the mine ceases operations?
Collapsed tailings dams containing waste from mining have been deadly in recent years in Brazil. In 2019, at least 240 people were killed when a tailings dam operated by miner Vale SA burst in central Brazil, washing away homes and covering swaths of land in sludge.
In 2015, another larger tailings dam collapsed in the same region, killing 19 and creating an environmental disaster.
“The situation around tailings dams in Brazil is far more sensitive after the recent accidents,” said Bosworth, the risk consultant. “Any company that wants to operate a tailings dam at this point needs to be prepared to have extra scrutiny on their operations.”
Belo Sun said no water will be taken or discharged into the Xingu River and its operations will be conducted in a safe, sustainable manner.
“Belo Sun’s approach is to always proceed in a low-key, responsible, and thoughtful manner and to develop the Volta Grande Project by listening to all stakeholders and adhering to local and international regulation,” the company’s CEO said.