In The Amazon, A New Mining Frontier For Iron Ore

A Trip To Vale's Promised Land

Meet Canaã dos Carajás, the new frontier of iron ore mining. It’s in the South of Brazil's Para, where jobs and mining royalties did not bring as much progress as expected.

Between 1982 and 1985, Brazil’s last military ruler, João Figueiredo, settled 1,551 families through colonization projects around the mining area of the Carajás Forest, in the south of Para state in the Amazon. The project to exploit the world’s biggest high-grade iron ore, discovered in 1967, started to get momentum after the first mine in Serra de Carajás (Carajas Hills) was opened. Today it is a complex that produces about $13 billion worth of iron ore per year, most of which is exported.

The early settlers, however, had no idea that they were going to live on top of the "biggest project ever" of Vale -- the world’s second mining corporation.

The goal of the military government was to reduce land conflicts in the Bico de Papagaio (“Parrot’s Beak”) region. The region was the center of the Araguaia guerrilla in the 1970s and is mainly situated around reserves holding an estimated 18 billion tons of iron ore, as well as deposits of manganese, copper, nickel, and gold.

Today, Vale digs 110 million tons of iron ore from the North Hills of Carajás. With the new project, called S11D, the company aims to double the production by exploring the South Hills of Serra dos Carajás until 2016. In June 2012, Ibama, the Brazilian Institute of Environment and Renewable Natural Resources, granted a provisory license for the enterprise, which is set to receive a $19.4 billion investment. A year later, in July 2013, the definitive license was granted.

When settlers first arrived there however, there were no astronomic values at stake.

“They put us here as watchmen. This wasn’t inhabited by people. When I got here, it was just woods, just the forest. ‘Anyone who gets the land and doesn’t clear it will have to leave’, they would say,” recalls the Maranhão-born worker José Ribamar Silva Costa, known as Pixilinga, waiving away the cloud of mosquitoes invading the balcony of his home in Vila Planalto, 12 kilometers from Canaã dos Carajás.

Like Pixilinga, many people moved to the region and settled in one of the three Centers of Regional Development (CEDERE). One of them, CEDERE II, would become the city of Canaã dos Carajás in 1994. The 30,000-people town is currently going through its second growth cycle. The first one happened with the opening of the mine “Sossego” in 2000. Vale started copper extraction at Sossego in 2004. Between 2000 and 2010, the population tripled.

In the 1980s the Brazilian military already knew that the iron ore reserves in the South Hills of Carajás – where the town of Canaã is located – were even bigger than the ones at the North Hills, whose exploitation started in 1984. So the military leaders tried at once to expel the rural workers who lived off their own land and cattle nearby.

“In these woods, there is a lot of animals to hunt, and also Brazil nuts, mango, banana, jackfruit, cupuaçu, açaí, lime,” says Antonio Maurício Gustavo, from Goiás, who's known as Tonhão.

In 1979, Tonhão took a three day trip and came walking from Xinguara, in Araguaia.

“Then everyone pitched in, giving a piece of land to build a village, a collective farm, and an orchard,” he says, seated under the shade of a mango tree. “When we were farming the land, a helicopter came from Vale, and down came the military officers to put up signs: ‘deforestation, selling the wood and fishing are prohibited.’ Then we thought: If Vale wants this area, so do we. And we arrived first. So we broke the signs, hence the name of our city.” The town of Racha-Placa (broken sign, in Portuguese) is about 80 kilometers from the town of Canaã. The episode that named the town happened in 1984.

The residents ended up making a deal with the military. They gave away an area for official research on the presence of mineral ore, while they went on with their project of building a village. At its peak, the town had 100 families, 2 schools, a health center, churches and even an ice cream shop – a big deal for such a remote area. “But 10 years ago, the people of Vale came back and said: ‘You guys are on top of the largest deposit of iron ore in the world, and we’re going to open the mine. If Canaã is the body, here is the heart of the project,’" Tonhão recalls. The community decided to resist. Some of the families, however, gave in when Vale went on to pay exorbitant prices for the farmers' land, and the workers were out of jobs. “Those with more land, like me, who have five children, could live off the farm, but most people depended on other farms for work, so they ended up selling their land to Vale,” shares Tonhão. “They killed us slowly.” Around him, the scenery is heartbreaking – most houses, the school and stores were demolished and the remains make the tropical landscape ghostlike. “They call us settlers, but all this is federal land, which they occupy too,” points out Tonhão. The 49 families who resisted Vale's siege decided to fight. With the help of lawyers of the Pastoral Land Commission (CPT), they managed to make the company buy an area of 340 bushels to house the families and pay a guaranteed monthly minimum compensation for two years to the families who lost their plantations and who are waiting to move to the new area. “It was a loss for the entire region. The kids now have to walk 14 kilometers to go to school, the rural workers have nowhere to buy what they need,” Tonhão laments. “They say we’re stopping the progress. We’ll see...”

In addition to denying any irregularities in the process of land acquisition, Vale argues that “the project Carajás Iron S11D will boost the economy with 40 billion reais in investments, besides generating more than 30,000 direct jobs during the deployment phase and approximately 15,000 jobs (direct and indirect) during the operational phase.”

But the people from Racha-Placa are not only worried about jobs. Their entire way of life is at stake.

At The Forests’ Gate

Vale’s mining sites are located within the Carajás National Forest. Those that are operating since the 1990s are located in the north, in the area within the limits of the municipality of Parauapebas. The new ones, to the south, are on the municipality of Canaã de Carajás. The Carajás Forest is a 411 hectares conservation unit that was created in 1998, after the privatization of the once state-owned company. A quarter of the area (104 mil hectares) is considered mining area, according to the management plan. The forest is administered by Vale in a partnership with Instituto Chico Mendes de Conservação da Biodiversidade (ICMBio), responsible for the management of the environmental reserves in Brazil.

The entrance sits within the town of Parauapebas and showcases the green and yellow logo of the company. It is often closed by protesters – from teachers to factory workers. Vale’s corporate security works as the de facto Police of the Carajás Forest. There is also a residential area on the hills to house the technicians and engineers. Those who travel to the idyllic residential center of Carajás, which houses 1,300 “outside” families that came to work for Vale, must get permission from the company a day before the visit.

Publica went inside the forest in a Vale SUV, driven by the company's press officer, for a visit scheduled a month before. However, we ended up having the same destination as the tourists who visit the site: Instead of taking us to get to know the mines, the officer drove us to the so-called “Zoo,” a park for rescued animals. He argued that it would not be possible for us to access the area of operations due to a lack of “security escort.” We returned the next day together with the staff of ICMBio, which administers the forest jointly with Vale. They took us to the area of operations – with the exception of the interior of the mines and other areas that truly require a security escort.

From the viewpoints above the 300 meters deep excavations of Serra Norte, the 80 ton excavator trucks extracting the ore from the chocolate colored pits look like toys. So do the “off-road” trucks that carry 400 tons of dirt, bringing back what’s left after washing and sorting through the sterile ore to be stacked in piles around the mines.

Vale's activities currently take 4 percent of the forest reserve. Between 2003 and 2012, Ibama fined the company nine times for environmental infractions. The most threatened ecosystem – the savanna metalófila or “canga” – covers 5 percent of the territory. It grows only on the top of the hills and often “hints” at the presence of ore, according to the biologist Frederico Martins, the Manager of Carajás National Forest. “This vegetation is exclusive to this equatorial environmental and was never properly studied,” Martins says.

Martins took Publica’s reporters to the area of the S11D project, the first one that will occupy the unexplored south hills of the Forest with its dozens of caves, endemic animal and vegetal species and natural lakes. Locals call one of the lakes "Dina Lagoon," in honor of the mythical guerrilla soldier and geologist of Araguaia, Dinalva Teixeira. Legends tell that she was able to transmute into a butterfly when she got into the woods, running away from the army. Dina disappeared in 1974 at the age of 29, after being arrested by the military.

The environmental licensing of Vale’s most ambitious project took eight years, and the company had to change the plan several times to obtain the installation license in 2013. A million dollar loan the by Brazilian National Economic and Social Development Bank (BNDES) has been partially approved and is being closely watched by economic technicians at the Brazilian government. Cine iron ore is the main item in Brazilian exports and is responsible for the nation’s positive commercial balance. Vale is responsible for 96 percent of the iron ore exports – which make 10 percent of Brazil's total exports.

The production of the Brazilian multinational is still larger in the state of Minas Gerais, where the company was founded, than in the state of Pará. However Carajás, in Pará, is the most expanding center because it has greater reserve potential and the ore holds an iron level above 66 percent. (Minas Gerais ores’ purity level is around 53 percent). “There will always be a market for Carajás. Our competitive advantage is the quality of the ore,” says Jamil Sebe, the Director of Vale’s Ferrosos Norte Project.

Besides investments in the mining itself, the project involves a $11.4 billion investment in logistics to drain the new production. Vale plans to duplicate the Carajás railroad, which is 892 kilometers long and leads to the company’s export terminal in the Atlantic port in the state of Maranhão. The duplication has been severely criticized by social movements throughout the region.

Between July and September 2012, a public lawsuit was started by the organizations Indigenous Missionary Council (CIMI), the African Culture Center in Maranhão and the Maranhão Society of Human Rights, and an injunction against the duplication was granted. But in September that year, a superior court allowed the construction to go on. The organizations complain that the project was authorized before Environmental Impact Assessment/Environmental Impact Report (EIA-Rima) was completed and that indigenous communities and quilombolas were not previously consulted, as determined by Convention No. 169 of the International Labor Organization (ILO).

Vale obtained the license from Ibama on Nov. 20, 2012, but the court case is still ongoing, and could change the future of the railway.

According to data in the judicial papers, the duplication of the railway will affect 27 municipalities, besides the Awá-Guajá indians and 86 quilombola communities, according to NGO Fundação Palmares. Overall, there are 28 conservation units in the area.

In Oct. 2012, amid the conflict between the company and the social movements, some organizations gave the CEO of Vale, Murilo Ferreira, Public Eye’s trophy of “worst company in the world.” The nomination was the result of a public vote conducted by international NGOs. The company’s name was suggested by the popular network Justiça nos Trilhos.

On the award’s website, a photo montage explains its motivations. “We turn forests into mines and water reservoirs – no matter how,” reads a fake advert under a picture portraying trees falling down a broken dam, besides the face of a crying indian. It alludes to Vale’s participation in the construction of Belo Monte, which sparked international outcry, and helps to explain how the company gathered 25,000 votes among the 88,000 that it got in total. Vale has a 9% percent participation in the Consortium Norte Energia, responsible for the construction.


At the core of the dispute between social organizations and Vale is a small territory, occupied according to the company’s plans since it was a state-owned enterprise. Despite a Vale campaign called “campaign against the theft of our minerals," when visiting the area, one can't help but feel that the company digs the natural resources, leaving very little in return.

Huge holes on the precarious roads require the attention of the driver. The cars compete for space with trucks loaded with cattle, fuel, machinery parts, tractors, metal scraps and coal. Many trucks feature logos of supermarkets and retail stores, which supply a 153,000 people city called Parauapebas, or “Peba.” The city's residents come from many different regions and they leave home early in the morning wearing their uniforms. It appears as if the entire population hopping on the vans (the only collective public transport) wears badges from construction and cleaning companies. In Parauapebas, it is easy to see what it means to have to face this reality. No visitor would think that this is the municipality with the second biggest Gross Domestic Product from the state of Para (R$ 15,9 bilhões) behind the state capital, Belem.

Hotels charge R$ 200 per room and offer everything – however almost everything is lacking. “We have it, just not right now,” is the answer you hear everywhere when trying to buy almost anything. Except for cigarettes and beer. There is also a shortage of water, even with the abundant waters in the region that are easily seen in the curves of the river Parauapebas, known as “Sebosinho.” Until October 2012, more than 87 percent of households had no sanitation, and sewage ran through the streets. “Pioneer” Maria Aparecida Alves de Oliveira, a 39-year-old maid in a hotel known as "Cida," does not get easily scared. At the age of 7, Cida came with her mother and siblings from the state of Goiás following her father, who was a “garimpeiro”. He was working in the mining trenches (“garimpos”) of Curionópolis. While the “Peba” was still being formed, Cida got pregnant at the age of 13 of the first of her five children. Today, her boys are young men who work in construction and her girls are hired by outsourced companies as housekeepers, except the youngest daughter, who was accepted by Vale’s junior training program.

The program, a partnership with the National Industrial Apprenticeship Service (SENAI), is the first step for anyone to get the much-desired “forest-green shirt,” which guarantees a registered job with the company. “She is now closer to having a future,” says Cida. “The building jobs come and go. One of my sons is now at the Belo Monte Dam, struggling through the mess going on out there,” she says, referring ro the riots by workers of the consortium responsible for the construction project in Altamira, 650 kilometers from there.

One figure is enough to explain why Cida is overjoyed by with the success of her youngest daughter: In 2012, Vale had 31,000 employees in the states of Pará and Maranhão, including the outsourced ones, according to the company’s press office. Other people interested in working for Vale have no option but to join the outsourced companies or to work within the service providing sector. That’s what a guy called Ivo did, when he “got tired of washing mining tools for outsourced companies.” He now has an internet café called Matrix, but business has been very slow. Why Such Deprivation?

The mining royalties (called Financial Compensation for the Exploitation of Mineral Resources or CFEM) and a quota of the Taxes on Goods and Services over the pelletizing and commercialization of ore totaled 75.09 percent of the 2010 income of the city of Parauapebas, a total of 505 million reais. According to the law, 65 percent of the CFEM (representing on average 2 percent of revenues obtained from the ore extraction) stay with the City Hall, 23 percent go to the state government and 12 percent goes to the federal government. City Hall claims that the influx of migrants and rural workers over the last years made its work more difficult. Between 2000 and 2010 the urban population grew 115 percent. “We decided to invest mostly in health and education in order to leave a legacy,” says Darci Lermen, of PT, the Workers’ Party, who finished its second term as a mayor in 2012. His main concern was preparing the town for the “emptiness” that the end of the production of the iron ore mines of Parauapebas' Serra Norte, will bring in 2037.

In search of more revenue for the city, Lermen hired a law firm and signed an agreement with the National Department of Mineral Production (DNPM) to audit Vale’s receipts. “Vale had already been fined by DNPM for discounting the cost of transportation by trucks from the roads to the mine, which is insane,” he cries.

The former president of Vale, Roger Agnelli, sent a letter to Brazil's President Dilma Rousseff to complain about the then mayor Lermen, accusing him of “embezzling public funds” by hiring private lawyers.

This happened in 2011, just before Agnelli was dismissed by the company’s Board of Directors, currently chaired by Previ, the Pension Fund of the employees of Banco do Brasil (“Bank of Brazil”), which is the major shareholder of the privatized company. Agnelli was considered too aligned to Bradesco Bank the largest shareholder from the “private” sector, followed by the Japanese trading company Mitsui – he had been an employee there. Our reporters had access to one of the lawsuits concerning the CFEM, a tax enforcement lawsuit filed with the Federal Court of Marabá. They had infraction notes from the DNPM that corroborated the version of the mayor. Lawsuits of this nature amounted fines of 4 billion reais to be paid by Vale to the DNPM. But Vale appealed it.

The candidate supported by Lermen lost the election in most part due to an obscure episode: The discovery of R$ 1.1 million cash inside the jet of a local businessman. The local press claimed that the money was linked to PT by the federal police, then took the words back – and nobody knows who the money was for.

The apprehension was reported by newspapers from the developed southeast of Brazil as being triggered by a unanimous call made from the “Parauapebas airport”. But Parauapebas has no airport. The nearest one is located, as everything else, in Carajás. The airport is inside the Carajás National Forest, beside the residential houses for Vale’s senior employees.

Unshared Wealth

Around 160 kilometers to the north of Parauapebas sits Marabá. The city is located besides one of the few asphalted stretches of the 4,977 kilometers long Transamazônica highway.

Located at the confluence of three rivers (Araguaia, Tocantins, and Itacaúnas) the road complex of Marabá stands on the remains of old Brazil nut farms, occupied in the 1950s. The city thrived with the gold rush in Serra Pelada. Encouraged by the dictatorial government, the miners (“garimpeiros”) took 30 tons of the metal from Serra Pelada, south of Marabá, according to official figures.

Today the treasure is in the hands of a Canadian mining company, in the town of Curionópolis.

But since then Maraba received thousands of migrants who came in search of the mining money. Between the 1980 and 1990s, however, the municipality lost most of the forest reservation areas after its limits were chopped up.

In 1985, the first load of iron ore from a mine excavated in Carajás was shipped through the Carajás railroad to the Ponta da Madeira Terminal in São Luís Island, in the northeastern state of Maranhão. Two years later, Vale’s territory in Carajás was renamed Parauapebas.

Besides the precarious infrastructure and bad social indicators, Marabá is the second most violent city in Pará, with 86.1 homicides per 100,000 people, four times more than the national average according to the study Map of Violence 2013.

The city was left to watch the 330 train wagons, loaded with iron ore, that cross Marabá everyday on the way to the port and the pig iron factories nearby. They have the worst jobs in the region.

In order to produce pig iron, local companies mix the iron ore they buy from Vale with charcoal allegedly coming from reforestation projects. According to Ibama, that comes, however, from illegal deforestation in 60 percent of the cases.

Marabá lives with a precarious rural area and is constantly present in national and international reports about slave work in precarious charcoal factories. Quite often these are installed within rural settlements that should grant life quality to the peasants who suffer from lacking credit and the abandonment of extractivism projects.

The most recent dream of progress in Marabá came when a a steel mill, Aços Laminados do Pará (ALPA), was close to being opened to verticalize the production of iron ore and create 5,000 jobs. Then President Luiz Inácio Lula da Silva pompously inaugurated the construction site of the “Vale Steel Mill”. But the mining company abandoned the project.

“After 30 years of having iron ore extracted from its soil, Marabá doesn’t have a knife factory for a guy to kill himself,” says the merchant Eliomar Freitas, who transferred his fish market from Belém to Marabá, expecting the development of the community. If the project S11D starts operating in 2016, the town of Canaã dos Carajás will face the challenge to invent its own destiny, different from Parauapebas and Marabá.


Agência Pública – Full Book: Public Amazon, an investigation.

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