Brazilian prosecutors say Anglo’s sale of Amapa iron ore shady

Brazilian prosecutors said Anglo American’s (LON:AAL) sale of its 70% stake in the Amapá iron ore operation in Brazil to Swiss group Zamin Ferrous in late 2013 was full of irregularities, suggesting the miner offloaded the asset to avoid paying for environmental damage caused by it.

In March that year, the company had to halt shipments from Amapá, located in the namesake state in northern Brazil, following a fatal accident at the floating dock in the Amazon River, used for loading iron ore onto vessels.

They also claim Anglo offloaded the asset to avoid paying for environmental damage caused by an accident at its floating dock, which killed six people and dragged vehicles, equipment and large amounts of iron ore into the Amazon River.

The Federal Public Prosecutor's Office (MPF) of Amapá decided to include Anglo American in a public civil action seeking compensation for environmental damages caused by the collapse of the company’s floating pier, which killed six people and dragged vehicles, equipment and large amounts of iron ore into the Amazon River.

Senators for the state went even further, claiming that Anglo — which has always denied any responsibility in the accident — gave up control of the operation to avoid dealing with the consequences, they said in statement published late on Wednesday (in Portuguese).

The lawmakers, including congressman João Capiberibe, say Brazil’s Federal Police investigated allegations of corruption involving state government officials and the Legislative Assembly of Amapá in relation to the Anglo-Zamin $136 million deal.

They said a probe into those fraud claims should be reopen, adding that Anglo American should pay 100 million reals (about $32 million) "it owes" for environmental damage to the Amazon river.

A spokesman for Anglo American told MINING.com that it should be made clear the sale of the company's assets in Amapá to Zamin was announced in Jan.2013, two months before the abrupt and unexpected accident, which resulted in the destruction of the port ship loader infrastructure and sampling tower and the tragic loss of six lives. He added the transaction was completed in Nov. 2013, and "carried out under market conditions with total respect to the applicable Brazilian legislation."

Studies conducted after the accident revealed the presence of pollutants in various streams in the municipalities of Serra do Navio and Pedra Branca do Amapari, and the public prosecutor assigned Zamin 60% of all liability for the environmental damage. Anglo American, in turn, was fined 20mn reals ($6.3mn) for the same reason.

Mining at Amapá was suspended and its entire staff laid-off in February 2015, when Zamin filed for bankruptcy in Brazil.