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Environment & Climate

An Amazon community braces for "monster" gold mine

The Volte Grande Project on the Xingu river is destined to be Brazil’s largest open-pit goldmine. But activists fear the environmental impact on indigenous communities.
3 Abr 2017 – 04:24 PM EDT

VOLTA GRANDE, Brazil – Misty rainforest and patches of green ranchland surround the town of Ressaca, where 300 families sustain themselves by digging for gold, as well as hunting and fishing.

Situated in the northern Amazonian state of Pará, the ramshackle gold mining town sits on the banks of the Xingu river, home to several unique turtle and fish species and the lifeblood to two indigenous communities - the Arara and Juruna.

Far from idyllic, it's name means 'hangover' in Portuguese. It sits on top of one of the largest gold deposits in the world and life here is about to get turned literally upside down after a proposed $388 million Canadian-owned goldmine won approval to be built on the town's land.

The Volte Grande Project comes at a critical time for Brazil as the country undergoes political and economic turmoil, in large part due to a massive corruption scandal. The current crisis is being used as leverage to push unpopular laws through congress, where the agribusiness and mining lobbies hold great influence, and some analysts fear that could undo longstanding environmental safeguards and protection of indigenous lands.

Ressaca’s main street is a mud road that dissects rickety wooden houses, a couple of small shops and bars blasting music or the muffled sounds of the latest soap opera on TV. That may soon be bulldozed and the town moved to a new location.

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On February 2, Para’s environmental authority granted the Canadian mining company Belo Sun its operating license. With the license Belo Sun can begin construction on the Volte Grande Project, destined to be Brazil’s largest open-pit goldmine.

That same week, however, the project came under fire. Both Brazil’s Indian Affairs Agency, FUNAI, and Altamira’s public prosecutor’s office, filed civil lawsuits against Belo Sun for irregularities in its environmental impact studies. A coalition of environmentalists and indigenous communities also condemned the project, warning that the mine poses a threat to the people living downriver since there is no long-term plan for handling its toxic waste.

The enviromentalists claim that in the event of an accident at Belo Sun people downriver could suffer a similar fate that befell those caught in the 2015 Mariana Disaster, when a dam holding back 32 million cubic meters of waste from an iron ore mine suddenly burst, causing the greatest environmental catastrophe in Brazilian history. It destroyed three towns, killed 19 people and contaminated 280 miles of river, which took a year to clean up.

Three weeks after the license was approved, Para’s justice court suspended the project for 180 days, accusing Belo Sun of illegally purchasing public lands, and ordering them to properly relocate local communities that will be displaced by the project.

But activists believe that under Brazil’s political climate it is just a matter of time before the action is repealed in federal court, which has happened several times before.

In a press release, Peter Tagliomonte, Belo Sun’s president and CEO said: “We are disappointed by this temporary injunction, however, these hurdles are expected and we view this as normal ... Our local Brazilian counsel is confident that the decision of the Court will be overturned on appeal."

"Monster" mine opposed

Jose Pereira Cunha, 52, the vice-president of a small gold miners’ cooperative in the town of Ressaca, refuses to believe any of Belo Sun’s promises to compensate the community or to involve them in the project, and warned all would be lost once the mine began its operation. “If it goes ahead, this house will be 200 meters underground. It is going to be one big hole,” he said, pointing to the floor of his home, a simple one-bedroom cement home with a wood roof.

“We need to stop this monster, this devil, because we want to keep our autonomy,” he added.

Fiercely independent small-scale miners like Pereira have been around for decades in Brazil. The informal industry employs around 200,000 people in Brazil. Though laws regulate the highly toxic mercury miners use to extract gold, they are often hard to enforce due to lack of funding to government agencies and the logistical difficulties of reaching mines deep in the jungle.

Canadian Belo Sun Mining Ltd is part of the Forbes and Manhattan investment group, a merchant bank managing several mining and other outfits worldwide. The planned mine pit will stretch four kilometers in diameter, and it is set to extract an estimated 60 tons of gold over a 12-year period, dwarfing Brazil’s once notorious Serra Pelada goldmine – made famous by Sebastiao Salgado’s epic photographs showing laborers scrambling antlike in the mud in that open pit mine.

Serra Pelada officially closed down in 1992 after having extracted a total of 30 tons of gold during its lifetime. Once the Belo Sun mine’s gold is exhausted, it is expected to have accumulated 231 million tons of waste, including mercury, arsenic and cynanide, although the Brazil-based Socio-Environmental institute (ISA) puts the number at 504 million tons. That would equate to a mountain of toxic earth as high as two of Rio’s Sugar Loaf Mountains, situated little more than a mile from the riverside and its fragile jungle eco-system.

In its lawsuit against Belo Sun, Brazil’s Indian Affairs agency claimed that the arsenic levels in the dam waste will be 37 times the level allowed by environmental regulations.

Critics point out that the environmental license issued to Belo Sun was based on studies carried out in 2009, three years before the Xingu River was completely transformed by the Belo Monte hydroelectric dam, which lies two miles to the north of where the gold mine is to be built.

The Belo Monte Complex, the third largest dam in the world, was completed in 2015 displacing more than 20,000 people and reducing the flow of the Xingu River by 80 percent. The dam irreversibly changed the lives of indigenous communities that survived largely by fishing, activists say.

The changes to the eco-system were so severe that Norte Energia, the consortium behind the dam, was required to carry out a six-year environmental impact study to see if communities on the river can continue to live there. Although that study began only one year ago, the Pará state environmental authority gave its go-ahead to the goldmine.

The project has also come under fire because the electricity generated by the Belo Monte dam will provide power to the goldmine.

The Canadian company has spent years working on the Volte Grande mine. Starting in 2010 Belo Sun quietly began buying up land in the region, employing locals as low-skilled workers and creating social outreach initiatives.

On a visit to Ressaca and the neighboring community of Ilha da Fazenda a week before the Belo Sun license was approved, a majority of the locals seemed supportive of the project in the belief they would be provided with jobs and compensation by the mining company in the future.

Indigenous foreboding

Less than eight miles downriver from Ressaca is Paquiçamba, the indigenous Juruna tribe’s reservation. Another 15 miles is home to an isolated tribe that has had no effective contact with the outside world and is uniqely vulnerable to modern encroachment, such as human diseases.

On a December visit to the village of Miratu in the Juruna reservation, the community was in a state of foreboding. Miratu is a sleepy village at the bottom of a slope of red mud that falls away to the river, the waters of which are now permanently low. On the opposite riverbank lies the Arara reserve, another indigenous community that is already overwhelmed by land invasions and illegal deforestation.

The Juruna – the name means “kings of the river” – now consider the river all but dead. There is no sanitation in their village and they rely largely on handouts from Norte Energia, the consoritium that owns Belo Monte. They are provided chickens, a rationed amount of gasoline every week and seeds to plant crops.

When asked about the planned Belo Sun gold mine, the Juruna described how the company had implanted itself in the region and carried out a cursory consultation process with them, but only after community leaders had gone to the state capital of Belem in 2013 to denounce the company for failing to reach out.

“[When they first came] they said there were no Indians living here,” said an angry Leliani Jacinta Pereira, 29, a female member of the Juruna tribe and former leader. The company finally did pay a visit, but the Juruna rejected the project, saying it presented a potentially bigger threat than the Belo Monte dam.

"They said we wouldn’t be impacted, but we will be; people are going to flood into the region,” added Leliani Jacinta.

For the Juruna, the goldmine represents a double blow.

Since Belo Monte’s completion, life for the Juruna and Arara has suffered. Fish stocks have plummeted. Norte Energia spent millions compensating the communities affected by the dam: monthly cash-handouts of up to $10,000 were given to each village for a period of two years, and infrastructure projects were implemented, including the building of hospitals and laying out of basic sanitation in villages – though many projects remain unfinished.

The compensation scheme caused other problems, sowing inter-tribal feuds, dividing villages, and resulting in an alarming rise in alcoholism, prostitution and illness on a scale never before seen in the affected communities.

Political crisis

Some analysts fear that Brazil's current economic and political crisis is undermining its protection of the environment. Brazil’s political institutions are being called into question with a corruption investigation known as Lava Jato (Car Wash), involving one of the country's largest privately-owned construction firms. The scandal has already taken down numerous politicians and corporate executives have been arrested or are currently being investigated.

The political crisis has being used as leverage to push unpopular laws through congress, which is currently dominated by the agribusiness and mining lobbies, some analysts warn.

According to Phillip Fearnside, 69, a leading expert on climate and environmental law at the National Institute for Research in Amazonia (INPA), Brazil is on the verge of passing a series of laws that amount to a wholesale undoing of longstanding environmental safeguards and protection of indigenous lands. In a paper published earlier this year, Fearnside outlined how a series of controversial laws aimed at unburdening the country’s bureaucracy and attracting foreign investment have already been passed.

Among the most alarming new laws is the creation of a new federal entity, the "Program for Partnerships for Investment" (PPI), which is intended to streamline private investment in infrastructure projects.

The PPI has the power to override any objections coming from Brazil’s indigenous affairs agency, FUNAI, the federal environmental authority, IBAMA, and any municipal authorities, effectively rubber-stamping any environmental obstacle that might get in the way of an investment.

Deforestation also soared in 2016, up 29 percent from the previous year, according to Brazil’s National Space Research Institute (INPE). The state of Pará is the epicenter of many of the country’s problems, with the highest rate of illegal deforestation in the country, one of the higest murder rates and the highest number of environment and land defenders killed in 2015, according to Global Witness.

Jobs and profit

In Altamira many people are jobless and eager for another boom like the one they experienced over a five-year period when Belo Monte came to town.

During the boom years of the dam’s construction, the town’s population swelled from 100,000 to 160,000, new shops and hotels sprang up, and business was generally good. Prostitution also skyrocketed – demand was so high among the workers employed by Norte Energia, so the story goes, that sex workers contacted Norte Energia and asked them to pay their employees at different times throughout the month, so they would not be overwhelmed on payday.

By 2015, when construction of the main dam ended, the population shrunk back to 110,000, and within a matter of weeks, there was a spike in joblessness, a rise in violence and a health crisis.

The same week Jose Pereira warned of the impending doom that the mine would bring, Belo Sun’s country manager, Mauro Barros, 32, and its social development manager, Juliana Magalhaes, 33, gave their version of the story in a tidy air-conditioned office situated on the outskirts of an oppressively hot Altamira, the boom town that received international spotlight with the construction of the Belo Monte dam.

Magalhaes dismissed claims made against Belo Sun by locals in Ressaca. “They’ve been there decades, but the subsoil rights have never been theirs,” she said.

"Claiming it as a way of life is something they’ve used as an argument to anchor themselves and fight against an entity that’s much more powerful than themselves,” she added.

When asked about the risk to the indigenous people living downriver, Magalhaes said that the mine would not present a threat. “They could benefit from this project; the royalties that will go to the municipality could go to roads, cacao production, health and even eco-tourism,” she said.

Barros assured that the company had done its due diligence, using the world’s “best experts and engineers with decades of experience.”

Critics of the project point out that the engineer who approved the technical study of the Volta Grande Project, Samuel Paes Loures, is the same expert who signed off on the building of the Samarco mine in the town of Mariana, where a breach left three towns buried in sludge and killed 19 people. Paes is currently on trial for homicide.

According to Belo Sun’s brief, the mine will inject over $300,000 a day into the local economy. Meanwhile, the government will receive about $1.6 million in royalties annually over the 12 years of the mine's operation. Brazil will also collect around $21.5 million in taxes annually distributed at the municipal, state and federal level.

Belo Sun employees stress they have gone out of their way to follow the rules and maintain a transparent and open dialogue with communities living on the river.

“In 2015 we met with [Juruna] leaders, showed them where the pit was going to be located, and they seemed very interested … We have researched their way of life, the impacts on that and how to mitigate damage,” said Belo Sun's Brazil manager, Mauro Barros.

For Belo Sun, the consultation process wasn’t paramount, at least legally, because of a quirk in Brazilian environmental law. Large development projects located more than 6.2 miles (10 kms) from an indigenous community are not considered at risk and as such the environmental licensing process goes to the state level for a final decision.

“We went out of our way considering we’re not obliged to do consultation because the project is more than 10 kilometers away,” added Barros.

Para’s environmental officials have advocated for the project for years. According to state authorities and Belo Sun, the mining concession is 7.5 miles from the closest village of Miratu. ISA and the Juruna, however, put the distance at almost exactly six miles (9.7 kilometers).

But human rights advocates argue that regardless of the 10 kilometer rule, Brazil is a signatory to an International Labor Organization convention, which requires that all “traditional peoples” must have free, prior and informed consent.

Christian Poirier, director of Amazon Watch, a U.S.-based environmental watchdog that has worked in the region for years, says that the marginal differences in calculations are largely irrelevant. “There is no plan for the removal of the mine waste, it’s a ticking time bomb,” he said.