MICLA

McGill Research Group Investigating
Canadian Mining in Latin America

Morro De Ouro/Paracatu, Brazil

Key Data

Company:Kinross Operational status:Active Materials extracted:gold Type of mine:Large scale, Open Pit Main issues:Public Health, Land Rights

Description

While mining began in Paracatu in 1722, mining in the city was at the small-scale or artisanal level until the 1980’s when high levels of foreign investment entered the country’s burgeoning mining sector[i]. Exploration and licensing of Morro De Ouro began in the early 1980’s. Production in Morro De Ouro commenced in 1987 under a joint venture between TVX and Rio Tinto. Ownership of the mine eventually passed into the control of Kinross, following a merger with TVX and a subsequent buyout of Rio Tinto’s share in 2004[ii]. Morro De Ouro holds probable reserves of 10.4M ounces, and generated an estimated $2.4 billion in revenue for Kinross in 2009[iii]. The Brazilian government earns royalties of 1% off all sales, an estimated 65% of which is given to the municipality[iv]; thus, the mine is a major source of revenue, as well as employment, as Kinross Paracatu employs an estimated 7.5% of the city’s workforce[v]. Kinross also has a worldwide reputation as a socially and environmentally responsible company. In 2006, the mine won the “Top Environmental Quality” Award from Ordem Do Brasil[vi] and in 2009, Kinross was ranked as one of the most socially responsible companies in Canada by a Jantzi-Macleans report[vii].

The possible health and environmental risks generated by high levels of arsenic and other toxic chemical byproducts have been prominent concerns of the community about Morro De Ouro. Dr. Sergio Ulhoa Dani, a local physician and activist, has been writing about the possible risks of arsenic poisoning in the community since 2007. Dr. Dani links long-term arsenic exposure to a wide variety of diseases and illnesses, such as kidney disease, cancer, and diabetes, amongst others[viii]. In another article, Dr. Dani also reports that a study conducted by University of Lavras researchers on the mine estimated the amount of “bio-accessible” arsenic to be between 13,000 and 35,000 tonnes. Dr. Dani estimates this quantity could pose a serious health threat to the city even if only “0.00001%” of the arsenic deposits were bioavailable[ix]. A 2012 study also claimed that cancer rates were disproportionately high in Paracatu, although Kinross responded by claiming that the cancer rates in Paracatu were similar to that of nearby cities[x].

Mining operations have also threatened the city’s Afro-Brazilian quilombo communities, who are descendants of maroons who moved to the area to escape slavery hundreds of years ago. The conflict between these maroon communities and the mining project began soon after the mine’s establishment, which precipitated a ban on artisanal mining in the area in the early 1990’s. This ban threatened the livelihoods of many members of the community, who have been artisanal miners for generations[xi]. In 2007, an expansion of the mine involving the construction of a new tailings dam created new conflicts with the maroon communities, as the site of the new dam was planned on land which was home to three quilombo neighbourhoods. Despite their ancestral rights to this land, titling for these quilombo communities is not adequate enough to properly secure these rights[xii]. Thus, these communities have limited ability to protect their land through Brazil’s legal system. In March 2014, a federal court rejected a class action lawsuit filed by Brazil’s Public Prosecution Office (MPF) (although the MPF appealed the decision). Residents also tried to halt mining activity through political action. Paracatu’s Municipality Council passed a bill in 2012 that attempted to ban mining activity in the city and its environs; however, the mayor vetoed the proposal[xiii]. Maroon activists have also faced various forms of intimidation and repression. One activist, Robson Ferreira da Silva, was fired from his job in local government and was later arrested “arbitrarily” after he denounced Kinross in a 2008 documentary[xiv]. Another maroon activist, Evane Lopes Da Silva, a leader of the quilombo community of Santo Domingo even allegedly faced death threats in 2012[xv]. While Kinross cannot be explicitly linked to either two cases, quilombo activists like Evane Lopes now feel their situation is “hopeless” due to what they feel is abandonment by the government.

Despite multiple attempts by local activists to limit or end mining activity in Paracatu, either through legal or political avenues, or through more direct forms of mobilization like street demonstrations, mining continues unabated. Morro De Ouro’s controversial expansion was completed in 2008, and Kinross expects Paracatu to continue producing an average of 55Mt/a between 2014 and 2018, and predicts the mine will be profitable until 2032[xvi].

Bibliography

[i] Do Oliveira, Gustavo. “EXPLAINING MINING COMPANY AND COMMUNITY RELATIONS IN PARACATU, BRAZIL: SITUATIONAL CONTEXT AND COMPANY PRACTICE.” Master’s thesis, University of Guelph, 2010, 54

[ii] Paracatu Project. National Instrument Technical Report 43-101. Kinross, 2014, 17

Technical Report prepared for Kinross Gold Corporation

[iii] Do Oliveira, 63

[iv] Ibid, 52

[v] Ibid, 55

[vi] Kinross. “Paracatu Brazil; Awards.” Http://www.kinross.com/operations/operation-paracatu-brazil.aspx. Accessed January 22, 2015.

[vii] Do Oliveira, 66

[viii] Dani, Sergio U., MD. “Awaiting Response.” Alerta Paracatu. May 5, 2008. Accessed January 22, 2015. http://alertaparacatu.blogspot.ca/search/label/ALERTA%20M%C3%89DICO. Written in Portuguese (accessed via Google Translate)

[ix] Dani, Sergio U. [Arsenic Released by Kinross in Paracatu Is Already Bioaccessible, Reveals Study.” Ecodebate: Cidadania & Melo Abiente. September 17, 2012. Accessed January 22, 2015. http://www.ecodebate.com.br/2012/05/21/arsenio-liberado-pela-kinross-em-paracatu-ja-esta-bioacessivel-revela-estudo-por-sergio-u-dani/. Written in Portuguese (accessed via Google Translate)

[x] “USP Professor Says That Incidence of Cancer in Paracatu Is above Average.” News – Paracatu.net. November 15, 2012. Accessed January 22, 2015. http://paracatu.net/view/4148-professor-da-usp-diz-que-incidencia-de-cancer-em-paracatu-esta-acima-da-media. Written in Portuguese (accessed by Google Translate)

[xi] Jose Dos Santos, Marcia. “A Black Slavery in the New Regime.” Combate Racismo Ambiental. January 11, 2012. Accessed January 22, 2015. Written in Portuguese (accessed via Google Translate)

[xii] “MAPA DE CONFLITOS ENVOLVENDO INJUSTICIA AMBIENTAL E SAÚDE NO BRASIL.” Fiocruz. 2014. Accessed January 22, 2015. http://www.conflitoambiental.icict.fiocruz.br/index.php?pag=ficha&cod=219. Written in Portuguese (accessed via google translate)

[xiii] Mapa De Conflitos Envolvendo Injusticia Ambiental E Saude No Brasil.

[xiv] Jose Dos Santos

[xv] Lopes, Evane. “Relato De Liderança Quilombola Sobre a Situação Em Paracatu.” [Marron leadership’s account of the situation in Paracatu] Combate Racismo Ambiental. March 29, 2011. Accessed January 27, 2015. http://racismoambiental.net.br/2011/03/29/mg-relato-de-lideranca-quilombola-sobre-a-situacao-em-paracatu/. Written in Portuguese, accessed via Google Translate

[xvi] Paracatu Project



Timeline of Key Events

1980