Brazilian court suspends country's largest gold mining project

A Brazilian court has suspended Canadian miner Belo Sun Mining's (TSX:BSX) Volta Grande project, Brazil's to-be largest gold mine, located alongside the Xingu River in the state of Para.

In response to a civil lawsuit filed earlier this month by the Federal Public Prosecutor's office, a federal judge has ordered the "immediate suspension" of environmental licensing for Vale Grande, environmental group International Rivers (IR) announced on Thursday.

Earlier this week Belo Sun provided an update on its licensing process, saying that the Environmental Council of Para State (COEMA) had met to consider the issuance of the Preliminary Licence (LP) for Volta Grande. Out of a 13-member panel, 11 voted in favour of granting the LP. However, one member, the State Public Prosecutor Office, did not vote, requesting to view the licensing process files before making a decision. Voting was therefore postponed until December 2.

Now, the Public Prosecutor's Office has challenged the validity and legality of the LP process, and the judge has agreed to suspend it.

The suspension will remain in effect "full analysis of effects on indigenous peoples has been carried out within the Environmental Impact Assessment (EIA)," IR writes, citing a news release (in Portuguese) from the Federal Public Prosecutor's office.

Belo Sun has released a statement saying that it will appeal the decision.

"The Company will take all applicable legal measures to appeal the decision of the Federal Judge and defend the validity and legality of the Licensing Process," Belo Sun wrote.

According to IR, Judge Sergio Wolney wrote in his decision that "the licensing of the mining project without necessary and prior analysis of impacts on indigenous peoples … constitutes a serious violation of environmental legislation and indigenous rights.”

Opponents of the project fear that the mine's vicinity to the controversial Belo Monte dam complex – which is designed to become the world's third largest dam – "may lead to devastating and irreversible consequences … for the quality of life and cultural heritage of indigenous peoples and their territories."

In September federal prosecutors asked the state government of Para to to reject permitting until "a proper" impact study on local Indian communities is completed.