Mining Firms Slam Brazil Indigenous Bill in a Sign of ESG Times

Proposed rules backed by President Jair Bolsonaro are considered too lax by large miners

Operations at a Vale SA Iron Ore Mine.
By Mariana Durao
March 23, 2022 | 10:24 AM

Bloomberg — There is a notable opponent to the Brazilian government’s plans to allow mining on indigenous lands -- the mining industry itself.

Proposed rules backed by President Jair Bolsonaro are considered too lax by large miners. In a statement Tuesday, iron ore giant Vale SA called for free, prior and informed consent by local communities.

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Companies are joining environmental groups and members of the public in opposing the fast-tracked bill, which is expected to be put to a vote in congress next month. It follows criticism of a decree to support artisanal miners, known as garimpos, whose operations often lack permits and damage forests, as part of Bolsonaro’s efforts to open up new areas to development.

Taking the side of indigenous groups underscores mining’s increased focus on environmental, social and governance issues amid rising scrutiny among investors and customers. Introducing loose regulations risks undermining efforts to rebuild Brazil’s sustainability credentials after two tailings dam disasters in recent years. Last year, Vale relinquished all of its mining processes on indigenous lands in Brazil.

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To be sure, opposition to the bill doesn’t mean large mining companies are against tapping deposits on indigenous lands per se. They just want it done with rules that are in line with international standards.

The government-backed bill would pit informal miners with little consideration for ESG matters against the formal industry that depends on ESG-savvy investors, said Marcio Santilli, founding partner of NGO Instituto Socioambiental.