Legal hurdles could hinder Canadian gold miner plans in Brazil’s Amazon

Brazilian authorities are fine tuning details of a lawsuit aimed to prevent the largest gold mining project in Brazil’s history from happening, as they argue Canadian firm Belo Sun Mining Corp (TSX:BSX) has failed to study the impact on Amazon communities.

The prosecutors, reports Reuters, have asked the state government of Para, which is in charge of licensing for the project, to reject the permit until “a proper” impact study on local Indian groups is done.

But the miner, which is working on its feasibility study for the $750 million Volta Grande project, on the Xingu River, a tributary of the Amazon, says it is already dealing with state officials as they are the ones who issue the permits.

"All I can tell you is that all the permitting for our project is done at the state level, and the approvals are at the state level," Chief Operating Officer Ian Pritchard told Reuters. "I can't tell you anything else."

Last year Brazil’s State Council on the Environment passed a controversy-charged ruling on gold mining in the Amazonas State. The decree, which limits but doesn’t outlaw the use of mercury, has had scientists and activists up in arms since then to the point it triggered a federal investigation into the project that found inconsistencies in the environmental assessment.

Belo Sun withdrew and then quickly re-instated a $50 million financing deal, provoking bewilderment from investors.

READ ALSO: Brazil a step closer to fully mining the Amazon

Volta Grande is being constructed near the controversial Belo Monte dam, which diverts part of the Xingu River into an artificial canal.

Brazil’s government argues the dam is needed to feed the country’s growing energy needs, but the Belo Monte has been the subject of decades of protests and legal challenges.

International environmental groups fear the combined effects of the dam and the proposed open-pit gold mine on the area.

Belo Sun’s100%-owned project is expected to produce more than 300,000 ounces per annum over its 10-year life.

Image from Wikimedia Commons