Mining Giant Joins Belo Monte Dam
The world's second-largest mining corporation, Vale, has stepped into one of the world's most controversial dams: Belo Monte. With its new share in the dam, Vale - and the Brazilian government - are banking on the hope that the electricity from so-called "clean" dams can power Brazil's continued export of commodities to China. In the case of the Amazon, Belo Monte may help power a record expansion of dirty mining. In so many ways, a nightmare "Avatar" scenario is ever closer to reality.
Hydropower - far from the "clean" reputation that development pundits have given it - has long been utilized to power dirty mining and smelting operations around the world. Despite the Brazilian government's best efforts to paint Belo Monte as impact-free - check out the government's latest expensive public relations spots released in 17 Brazilian airports last week - Belo Monte will be no different, as Vale's 9.2% share will allow it to dedicate about 400 MW of the dam's guaranteed capacity for use in mining.
400 MW may be a drop in the bucket, but when added to Vale's investment in 9 other Brazilian dams, and after considering the more than 60 dams planned by the Brazilian government for the Amazon, the future of dam-powered mining in the Amazon becomes a bit more frightful. According to Brazilian Mining Institute IBRAM, over $40 billion USD of investment in mining is expected to cover the entire Brazilian Amazon through 2015.
A New Mining Threat in the Amazon
Scroll through the slideshow above to see maps of current, planned, and future mining concessions, in that order, in the region of the Belo Monte Dam. Southeast of the Belo Monte Dam is one area of concern: the Carajás mines, the world's largest iron deposits, owned and operated by Vale. On the maps, the Carajás mines are colored red, near the bottom center of the image. Over the next few years, Vale is set to begin a massive expansion of these enormous Carajás mines, by adding 40 million tons of iron ore per year to the 90 million tons per year that are already produced there. With the expansion of the Carajás mines on the horizon, Vale's entry into Belo Monte looks like the portent of a drastically different landscape.
Vale's use of hydroelectric dams to power mining dates back almost 30 years to 1984, when the 256-foot high Tucuruí Dam (4000 MW) began operation, powering an explosion of iron ore extraction at the Carajás mines, and putting Brazil on the map in the global minerals trade. The Tucuruí Dam created the 72-meter deep Lago Tucuruí reservoir, which flooded 2,850 square kilometers. The reservoir displaced 35,000 people, flooded 38,700 hectares of the Parakanã Indigenous Reserve, and led to the removal and relocation of the Eastern Parakanã, a tribe that had been contacted only a decade earlier. Construction of the Tucuruí Dam attracted thousands of migrants to the area, which increased incidences of malaria and HIV. A full 20,000 workers were laid off after the completion of Phase I of Tucuruí's construction, and by 1985, the Carajás mines had already produced 1 million tons of iron ore using Tucuruí's electricity. By 1987, powered by Tucuruí Dam, the Carajás mines were producing 13.5 million tons of iron ore per year.
In 1998, Phase II of the Tucuruí Dam began when Eletrobrás added eleven 375 MW Francis turbine generators, bringing Tucuruí's total installed capacity to 8370 MW. As a result, by 2006, the Carajás mine produced 81.7 million tons of iron ore per year, and in 2009, that number reached 90 million tons of iron ore per year. What worries technical experts and civil society alike is that the Belo Monte Dam may follow the same progression as Tucuruí: what began as a 4000 MW dam may become a larger project years down the road.
The impacts of the Carajás mines on indigenous people have continued through recent history. In 2006, in protest over the dangerous impacts of iron ore production near the Catete indigenous territory, Xikrín Kayapó took 600 Vale workers hostage and blocked the Carajás train, which exports 250,000 tons of iron ore daily to the port of Porta Madeira in São Luiz for export abroad. It was a true protest against the dangers of ruthless commodity export. As seen in the above maps, future mining concessions could even take place inside indigenous territories themselves, including the Catete territory.
If the electricity from mega-dams like Belo Monte and the Tapajós Complex comes on line, Vale - and also its competitors Alcoa, Gerdau, ArcelorMirral, Mineração do Rio Norte, AngloAmerican, and Colossus -- would be able to extract and refine unprecedented amounts of minerals from the soils of the Amazon. Mining would proliferate, and the Amazon could look more like the Alberta tar sands than a forest sea of green.
Dilma's Agenda for Vale
Vale may have decided to join the Belo Monte Dam only because the Brazilian government is playing a stiff hand to gain greater control over the company's profits. Indeed, Dilma recently sent CEO Roger Agnelli packing, a step towards gaining greater control over the company after it was partially privatized ten years ago.
Having Vale in the Belo Monte Dam is a way for the government to make
sure that Vale's profits from Chinese commodity purchases flow more
easily into Treasury coffers. Treasury capitalizations to the Brazilian
Development Bank's (BNDES) have allowed BNDES to disburse record amounts
to Brazilian industries, eclipsing the amount lent by multiateral
development banks in the region. BNDES has disbursed $300 billion reais since 2008, including $20 billion reais for the Madeira Dam Complex, and an expected $25 billion reais or more for the Belo Monte Dam Complex.
Why is greater government control of Vale a problem? Environmentally and socially, the sheer size of the mining operations planned for the Amazon should scare anyone, whether a company like Vale is privatized or state-owned. Mining is one of the dirtiest industrial activities on the planet, in terms of both its immediate environmental impacts and its CO2 emissions. Also, mining enclaves more often than not lead to poverty and social conflict, rather than increased livelihoods and development benefits.
Financially, government control of Vale is a problem because there have been recent concerns over Brazil's monetary policy. Some say that there is a direct line between the Treasury and BNDES that acts as a "parallel economy". According to Miriam Leitão, Brazil's military dictatorship similarly created a parallel economy that funneled public sector money directly into the pockets of government-owned developers. At the time, millions of reais were grafted from pension funds by government cronies and invested in pet hydropower projects such as Tucuruí Dam, Itaipú Dam, and Balbina Dam, three dams that emitted far greater amounts of greenhouse gases than equivalent-sized fossil fuel power plants. So far, commitments for the financing of the Belo Monte Dam have followed suit, as both BNDES and construction consortium Norte Energia, S.A. have relied on subsidies from Brazilian pension funds to bankroll their accounts.
With Vale in Belo Monte and the government taking greater control of the mining sector, it looks like the Amazon will turn increasingly into a hotbed for dirty mining. For centuries, citizens of the Brazilian Amazon have asked when their lands will be worth something greater than the resources extracted from them. With Vale now in Belo Monte, it doesn't look like they'll be getting an answer any time soon.