Mining in the Amazon: Challenges for sustainable development

Illegal mining, highly harmful to the environment and carried out in wildcat mining camps (garimpos) without operating licenses, is increasing uncontrollably in the Amazon and could afflict industrial mining, a source of important resources for Brazil and the regional states, by further compromising Brazil’s reputation, already shaken by the recent years’ increase in deforestation.

“With all its potential for violence, illegality and irresponsibility with the environment, illegal mining will swallow up industrial mining. Whether you like large mining companies like Vale or Alcoa or not, we have a door to knock on to file complaints and make demands. But who do I complain to about illegal mining?” Said Sergio Leitão, executive director of Instituto Escolhas, in this two-panel hybrid seminar (in-person and online) held by the FHC Foundation and the Brazilian Mining Institute (IBRAM), which lasted an entire morning.

“If the Brazilian authorities do not take the necessary measures to combat illegal mining and protect the Amazon, Brazil will soon be subject to international sanctions, and our mining products will be treated like the illegally extracted ‘blood diamonds’ in some African countries,” explained the environmentalist.

“The Amazon is experiencing a perfect storm, in which deforestation and illegal mining compound land insecurity, deteriorating social conditions and violence, threatening a biome that is Brazil’s greatest asset,” said Hugo Barreto, Director of Social Investment at Vale, in charge of Mosaico de Carajás for 35 years now—a group of conversation units and from where the mining company extracts 60% of its ore production, which, according to Barreto, impacts only 2% of the Carajás National Forest.

Barreto said it is not necessary to reinvent the wheel to reverse the destruction of the Amazon: “Expanding the alliance and partnership model between governments, legal/responsible mining companies, and competent civil-society and third-sector entities in the region is the way forward. Combine the experiences of those who know what to do and where to act, and bet on systemic and scalable solutions to keep the forest standing, value diversity, meet the local population’s demands and recover degraded areas.” See his presentation, with figures and detailed information on the company’s operations in Pará in the Related Contents section on the right of this page.

Pará must invest in the bioeconomy as the 3rd pillar of development, said the state’s governor

“Pará has an astonishing amount of minerals that need to be legally explored in an organized manner, bringing a return to the state, municipalities, and its population of more than 9 million inhabitants—the largest in the Amazon region. We are already the country’s top mineral exporter, with 180 million tons of iron ore and other mineral products exported in 2021—48% of the Brazilian total. Our exports totaled USD 27 billion, which translated into almost BRL 10 billion in taxes, royalties and fees, and around 300,000 direct and indirect jobs. We will continue to be a mining state,” said Helder Barbalho, governor of Pará. See his presentation in the Related Contents section to the right of this page.

“Pará’s current economic pillars are mining and agribusiness, two activities directly related to the forest and the environment. Mining and agribusiness need to be balanced with the preservation of the Amazon, creating a sustainable socioeconomic development model that secures the preservation of the forest, its rivers, and its biodiversity. For that to happen, it is essential to develop a third pillar: bioeconomy. Obtaining that synergy between economic, environmental, and social development is our great challenge,” said the governor.

The illegally mined area has increased tenfold in 35 years, according to data from MapBiomas

“In the Amazon, what has really grown is illegal mining. Its area has already surpassed the size of industrial mining. From 1985 to 2020, the illegally mined area in the Amazon grew tenfold, while the industrially explored area increased 4.7 times. The Amazon region currently concentrates 93% of the illegal mining camps in Brazil,” said Tasso Azevedo, coordinator of MapBiomas, who introduced a digital platform that tracks real-time land use throughout Brazil (see Related Contents section).

The forest engineer and environmentalist warned that although industrial mining occupies only 0.1% of the Amazon region, it attracts other activities to its surroundings. Thus, its impact extends and sprawls across the territory.

Also according to Azevedo, data from MapBiomas shows that 66% of the Amazon is still covered by forest. However, about 10% of that area has already been cleared at least once, and another 10% has undergone regeneration, meaning it no longer shelters a native forest. “Today, the original conserved forest occupies 40% to 50% of the Brazilian Amazon. What is most worrisome, is that we are witnessing highly accelerated land use change. One-third of deforestation has occurred in the last 35 years,” said Tasso.

Sustainable development requires overcoming ideological and partisan differences

Mônica Sodré, executive director of the Political Action Network for Sustainability (RAPS), drew attention to the political dimension of the sustainability issue: “Sustainable development cannot be achieved without overcoming ideological and party differences. In Brazil, according to a survey RAPS conducted among the Brazilian House of Representatives, the representatives who usually vote for the environmental cause are mostly from leftist parties. That needs to change, because the Amazon is a national heritage that everyone must defend,” she said.

According to the political scientist, RAPS, founded ten years ago, has been working around four objectives regarding the Amazon:

• To increase the degree of knowledge of congresspersons and voters;
• To bring awareness to political leaders who are not from the left-wing spectrum;
• To mobilize political parties, because when the agenda is sustainability, congresspersons tend to vote according to party orientation;
• To look to the future, because the tendency is to have a more conservative Congress with fewer effective parties—somewhere between 10 and 12.

“Looking at Congress, understanding the forces at play there and how representatives and senators see the issue of the Amazon and sustainability, in general, has been one of RAPS’ missions in the last decade,” she said. In June 2022, the organization partnered with the Frente Nacional de Prefeitos (a Brazilian Mayoral organization) and launched the publication “Desenvolvimento Sustentável: Guia Prático para Prefeituras” (“Sustainable Development: Practical Guide for Municipal Governments”). The guide provides references, case studies and financing paths for municipal governments throughout Brazil to foster actions aligned with the UN Sustainable Development Goals.

Mineral exploitation in indigenous lands, a government priority, requires careful analysis

Mônica warned of the current administration’s and its support base in Congress’s attempt to approve the request for urgent consideration of Bill 191/20, which addresses the exploitation of mineral resources in indigenous lands. If the request is approved, the bill would go straight to House Floor Consideration, without going through the appropriate committees.

“President Bolsonaro defined Bill 191 as one of the priorities at the beginning of this legislative year (2022), and what it does is establish the conditions for surveying and mining within indigenous territories. This is critical and needs to be well discussed by the entire Brazilian society. Therefore, the emergency request is not suitable,” she said.

Environmentalists and mining sector representatives vehemently rejected the exploitation of mineral resources in indigenous lands. A Ministry of Mines and Energy representative under the current administration was its only defender.

Bill 191 seeks to comply with what is written in Brazil’s Constitution, which provides for the possibility of economic activities in indigenous territories. It is not a final text. Everyone can contribute to its improvement,” said Lilia Mascarenhas, who recently took on the position of Secretary of Mining at the Ministry of Mines and Energy.

She believes Brazil should study cases from Canada and Australia, whose mining sectors are just as relevant as Brazil’s. “These countries show that the mining sector and indigenous peoples can coexist through contracts and partnerships that allow them to benefit from the sustainable exploration of natural resources in their lands. The mining industry is Australia’s largest employer of the Aboriginal community,” she said.

According to Hugo Barreto, Vale has officially decided to renounce mineral exploration in indigenous lands. “We returned all 104 survey requests that we had submitted in the past and that we no longer intend to follow through with. Our policy regarding the relationship with indigenous peoples who live close to our areas of operation is 100% aligned with the UN Declaration on the Rights of Indigenous Peoples. That is our commitment,” he said.

“Illegal mining in indigenous lands is a curse that destroys communities, forests and rivers. Currently, there are illegal mining camps in 11 indigenous areas. That problem can be solved with the help of remote monitoring technology and tracking equipment and if the Army and the competent bodies take action,” said Tasso Azevedo.

Environmentalists and authorities are split on artisanal mining

Small-scale mining has split environmentalists, authorities and mining sector representatives. For some, it is a reality in the immense Amazonian territory. It needs to be properly regulated, preferably through cooperatives, to respect environmental and labor rules and properly contribute to tax payments. For others, it opens the door to expand mining and destroy the forest.

“The laws and norms in force in Brazil deal with industrial and illegal mining. However, there is a gap concerning the regulation of small-scale mining, which is important because the large mineral deposits are already being exploited. The future lies in smaller deposits, which is why it is important to define the rules and programs to support small-scale mining, especially through cooperative and associative projects,” said Ronaldo Lima, director of Brazil’s National Mining Agency (ANM).

“It’s no use pretending that illegal small-scale mining doesn’t exist, because it’s a reality in the Amazon. It is essential to define a robust public policy for artisanal mining with clear rules and processes. I’m not proposing to wipe the slate clean for the illegal mining camps, but help the small-scale mining activity to comply with the law by ensuring that it respects the rules, protects the environment, and pays its due taxes,” said Governor Helder Barbalho.

“If we open the door for the so-called artisanal mining, the already fragile licensing will become even more fragile. We often see illegal mining camps that seek to present themselves as small-scale or artisanal to obtain funds from the Brazilian Bank of Economic and Social Development (BNDES) and continue operating,” warned Sergio Leitão.

The lawyer and environmentalist criticized Law no. 12844/2013, which allows wildcat miners, or other agents involved in mining, to sell gold to institutions authorized by the Central Bank without presenting any proof that the extraction has taken place in a legal area. “When this law, which is based on good faith, was passed less than ten years ago, we did not realize that we were creating a monster, as it establishes the right to abuse rights. We need to defuse this bomb by changing the legislation,” he said.

“I want to make it clear that Bill 2159/2022, presented by federal representative Joenia Wapichana, which establishes new parameters for the purchase, sale and transportation of Brazilian gold and revokes the principle of good faith, has our full support. Illegal mining is the enemy of industrial mining, which is compliant and pays taxes,” said Raul Jungmann, CEO of the Brazilian Mining Institute (IBRAM).

According to Ronaldo Lima, one of the ANM’s priorities is to regulate the exploration of new strategic minerals for producing clean energy and reducing carbon dioxide emissions, as in the case of wind energy and electrification of vehicles. “We’re living amid contradiction. Part of the world’s and Brazil’s public opinion wants less mining. Yet, the fight against climate change and the transition to a low-carbon economy requires the exploration of strategic minerals. Brazil has substantial reserves of some of those minerals, such as niobium, and needs to make its contribution by extracting them responsibly and selling them to other countries,” he said.

Former Defense Minister defends more coordination with neighboring countries

Jungmann, former Minister of Defense and of Public Security, warned of illegal mining’s growing involvement with organized crime, including international drug trafficking: “Violence is exploding in the Amazon, which has 17,000 kilometers of borders, including with four countries that are among the largest cocaine producers in the world. In addition to technology and intelligence, it is essential to further coordinate with neighboring countries to prevent the Amazon from becoming a lawless land. Unfortunately, the Amazon Pact is completely paralyzed.

“Sovereignty must be looked at from another angle. We are losing the Amazon to organized crime and violence. Social inclusion is fundamental for protecting the Amazon. It’s impossible to talk about zero deforestation without talking about the fight against poverty. The illegal mining rafts are recruiting children from poor communities in the Amazon region,” said biologist Roberto Waack, chairman of the Board of Instituto Arapyaú and member of Concertação pela Amazônia.

For Otávio Carvalheira, President of Alcoa Brazil, one of the largest aluminum producers in the world and in Brazil for 57 years, mineral exploration must always be based on the three-tiered fight against illegality and for social and environmental responsibility and legal security.

“The social and environmental license to operate is something that is earned every day, not just when obtaining authorization to operate in a given region. Therefore, we seek constant dialogue with all those involved, especially the local communities. We also try to reduce the impact of our projects on the forest, rivers and biodiversity as much as possible by seeking to mitigate them. When it is impossible to do so completely, we look for ways to compensate,” said the executive (see his presentation in the Related Contents section).

“The topic we are dealing with today is fundamental for Brazil, and as a think tank that seeks to preserve and carry forward the legacy of former president Fernando Henrique Cardoso, the FHC Foundation is always ready to collaborate in deepening the reflection and dialogue, always with a public spirit and in favor of sustainable socioeconomic development,” said former Minister of Foreign Affairs Celso Lafer, who took on the Chairmanship of the Board of Trustees of the Fernando Henrique Cardoso Foundation at the beginning of the event, held in partnership with IBRAM.

Watch the complete video of the debate (in Portuguese).

Otávio is the content editor at Fundação FHC. He is a political and international affairs journalist, a former correspondent for Folha de São Paulo in London, and former editor of the estadao.com.br website.

Portuguese to English translation by Melissa Harkin & Todd Harkin (Harkin Translations).