Sunday, 17 June 2012

VALE - Mining giant investigated over alleged Brazil environmental breaches


Source: Greenwood Management ApS

One of the world’s largest mining firms is under investigation over claims that it contravened environmental laws put in place to protect Brazilian forests and native tribal land.

Brazil’s prosecutors office is looking into reports that Vale SA failed to replant destroyed forest land and improperly used Amazon Indian land when operating two huge copper mines in the Amazon region. The forest were reportedly damaged when the mining giant built a power line for the one of the mines.

The Sossego copper mine, which is the firm’s most productive copper mine – producing 109,000 tonnes last year – is being investigated over the claims that Vale improperly used Indian land. However, Vale emailed Reuters to defend its case, claiming that both of its copper mines were at least 50km away from the Indian settlements of Cateté and Djudjêkô and that they are both located outside the Xikrin reservation. Vale also added that it was not aware of the details of the investigation that is underway.

The power line investigation centres around claims that, in building a power line for the Salobo copper mine, Vale failed to replant damaged parts of the forest. The firm told Reuters that it had permission to suppress vegetation from the regulator that had legal powers in the region. Vale is currently expanding the production capacity at the Salobo mine, from 100,000 tonnes of copper concentrate per year, to 200,000.

The firm is also under investigation over its alleged failure to meet obligation to two tribes affected by its Onça Puma nickel mine, which is also located in the Amazon region. Vale produced more iron ore than any other mining firm in the world and is seen as a vital producer of raw materials for the steel industry.

The steel industry in Brazil is booming at the moment, thanks to its economic growth and resulting investment in infrastructure. The fact that the country is hosting both the FIFA World Cup and the Olympics within the coming four years is also boosting the steel industry.

The steel industry has, in recent years, been encouraged to use charcoal from renewable plantations – such as those run by Greenwood Management – during the production of steel. The use of native timber in the production of charcoal was discouraged by stopping steel firms from receiving government cash if they used charcoal from the native forests. As a result, the demand for sustainably produced charcoal has increased.

With regards to the progress of the investigation into Vale’s alleged environmental breaches, no charges have yet been made. Vale, meanwhile, claims it is waiting for formal notification of the investigation and is willing to cooperate by providing any information needed.

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