By JOSÉ RAIMUNDO TRINDADE*
The current Brazilian situation points to a far from promising scenario, with the destruction of social and environmental rights that affect the communities most affected by projects involving large mineral capital.
Introduction
In recent decades, the presence of large-scale mineral capital in the Amazon has become one of the region's main economic elements, with most of these companies being transnational companies that operate the international production and transaction flows of the main mineral commodities exported by Brazil. The shareholding structure of these companies is formed by the three main economic agents of capitalist modernity: the State, financial capital and industrial capital, both national and international.
The analysis developed here, centered on the mineral sector of the eastern Brazilian Amazon, is justified by its importance for regional and national productive dynamics and by the strategic nature of the mineral reserves found there for capital accumulation, as well as by the profound social and environmental impacts that mineral exploration causes in the region. Mineral exploration accounts for almost 75% of the exports of the state of Pará, the largest economic segment of the GDP (Gross Domestic Product) of the state and one of the most significant in the region as a whole, as can be seen in the Regional Accounts data.[I]
The mineral sector has historically been a highly monopolized segment, especially in the iron ore and aluminum (bauxite) segments. This is partly due to three aspects that have enabled strong concentration and centralization of capital, two of which have already been listed above: (i) the spatially limited monopolizable capacity to appropriate mineral potential; (ii) the technological capacity to operate, especially in the long-distance and large-scale transportation industry (railway transport logistics and ocean navigation); and (iii) the intricate relationship between the sector's capital and state institutions that define the complete or partial appropriation of mineral income by private capital.
This text is divided into four sections, in addition to this introduction. The first section addresses the issue of the Brazilian primary export pattern and the theoretical aspects of accumulation by spoliation, as established by David Harvey (2005), a macroeconomic condition directly linked to mineral exploration in the region; the second section addresses the transnational mineral capital enterprise in the region, showing how transnational corporations have established themselves as the basis for mineral accumulation; the third section delves into the factors that define the exploitation of the Amazon subsoil; finally, it shows how this mining economic pattern does not produce social development effects and places the occupied territory at systemic environmental risk..
Primary-export pattern and accumulation by spoliation
The capitalist system is configured in a dynamic of accumulation on an increasing scale. A process of renewed cycles of accumulation and production of more value that includes diverse territorial spaces of reproduction, making up a globalized reproductive dynamic.
The Amazon constitutes one of these local spaces of capitalist exploitation, a territory of expanding accumulation that underwent an economic reconfiguration throughout the various cycles of Brazilian capitalist development during the 20th century until the current configuration of a neo-extractive reserve of natural resources with effects on its occupation, space, land use, value, labor relations and environmental disintegration.
In recent decades, a new relational arrangement with global capital has increasingly been established throughout Latin America. This pattern of capitalist development, centered on some common axes, has become widespread in several countries on the continent, establishing what Osório (2012), based on a Marxist perspective, defined as the “export pattern of productive specialization.”
In this context, two aspects are important: (i) the role of Amazonian mineral production in the current logic of Brazilian development, centered on increasing economic reprimarization; and (ii) the high environmental degradation produced by established forms of mineral exploration, which David Harvey (2005) calls accumulation by spoliation. Economic reprimarization is more evident in economies that have achieved a higher degree of industrial complexity, as is the case of Brazil.
Specifically, the evolution conditions of the Brazilian export basket in recent years raised the question of the problem of the development of an “export pattern of productive specialization”, whether due to the export base of low technological intensity, or due to the strong dependence on the cycle of appreciation of the international demand for basic or primary goods.
Regarding accumulation by dispossession, it is worth emphasizing that accumulation by dispossession constitutes a historical mechanism of capital reproduction based on the appropriation or “dispossession” of previously existing wealth or property, capable of giving way to the conditions of capital accumulation in the face of capitalism’s recurring crises of overproduction. This form of accumulation refers to the previous conditions of development of the capitalist mode of production, which Marx ([1867], 2013) called primitive accumulation of capital.
These forms of dispossessing accumulation are very diverse, but they have a common point in being mechanisms of a high degree of social and environmental degradation. In this way, the exploitation of natural resources and mineral neo-extractivism are very characteristic of a high-scale exploration process that uses mineral deposits of high content and easy prospecting, typical of the great Amazonian deposits, both iron and bauxite, both main ores exploited in the region we treat.
The specific conditions for the expansion of the Amazonian mineral industry are the result of the expulsion of several populations from their original territories, as well as the high environmental cost to the region, as this article will seek to demonstrate. On the other hand, the privatization of state-owned companies such as Vale in the 1990s, together with the huge forest areas devastated to guarantee mineral exploration, are elements that contribute to the identification of the current neo-extractivist cycle as a process of accumulation by plunder.
The presence of transnational mineral capital in the Amazon
The fact that the Amazon plays the role of repository of primary use values for big capital creates a situation in which this vast territory enables a dual role. On the one hand, it guarantees a gigantic mass of exportable values that favors the balance of payments, via exports to the national economy. On the other hand, the low costs of mining production enable profits for transnational corporations in the sector that operate in the region, whether due to the quality of the mineral or the enormous transfer of extraordinary income from the mines and logistics, almost all of which is provided by the Brazilian State, as will be demonstrated.
The mineral sector has historically been a highly transnationalized segment, especially in the iron ore and aluminum (bauxite) segments. This is partly due to three aspects that have enabled strong concentration and centralization of capital, two of which have already been listed above: (i) the spatially limited monopolizable capacity to appropriate mineral potential; (ii) the technological capacity to operate, especially in the long-distance and large-scale transportation industry (railway transport logistics and ocean navigation); and (iii) the intricate relationship between the sector's capital and state institutions that define the complete or partial appropriation of mineral income by private capital. In the case of iron ore, three large companies control the transoceanic market: Vale, Rio Tinto and BHP Billiton.
The primary aluminum segment is controlled by the so-called “six sisters”, with some structural changes that have occurred in the last two decades: Alcoa, Alcan, BHP Billiton, Norsk Hydro, Pechiney and Comalco, the first two being integrated producers of raw material (bauxite) to final goods.
From all this, it can be inferred that national investments and, mainly, foreign investments, guided by the Brazilian State, in this period, ensured the insertion of monopoly capital in the region, and much more than that, it guaranteed capital accumulation on a large scale.
But recently, it can be highlighted that the role of the mining sector in the Amazon has not regressed, on the contrary, mining in the Amazon has risen to a leading role considering the volume of exports and its share in relation to the Gross Domestic Product (GDP) of the state of Pará, however, with regard to a better distribution of income from mineral exploration towards local society, very little has been contributed.
In general, it can be seen that the share of the mineral extraction industry in the composition of industrial GDP has increased in all the federative units presented in the table above. However, the main emphasis on growth falls on the increasing contribution that the mineral extraction industry makes to the economy of the state of Pará, since it can be seen that the average growth rate for the period from 2002 to 2021 registers a growth of 30%.
Tabela 01 – Main transnational mineral exploration companies or holdings located in the Amazon
| Company | Capital (origin) | UF | Municipality of Operation |
| OK | Bra/Japanese | PA | Paraupebas |
| PA | Ourilândia do Norte | ||
| PA | Canaã dos Carajas | ||
| Salobo Valley | Bra/Japanese | PA | Maraba |
| CSN Mining | Bra/Jap/Chi | RO | Itapuã do Oeste |
| Hydro | Nor | PA | paragominas |
| PA | barcarena | ||
| Mining Rio do Norte | Aus/Eng/Usa/North | PA | Oriximin |
| Beadell | From | AP | Pedra Branca do Amapari |
| Imerys | From | PA | Ipixuna |
| PA | barcarena | ||
| Alcoa | Usa/Aus | PA | juruti |
| Taboca | AM | President Figueredo | |
| Cadam | USA | AP | Jari's victory |
| Pancake | Ing | PA | Itaituba |
| White Solder | good | RO | ariquemes |
| AVB Mining | From | PA | Curionópolis |
| PA | Blue Water of the North |
The territoriality of transnational companies and the search for extraordinary profits in the Amazon – the cases of iron and aluminum exploration
The variability of mine availability and quality is related to locational aspects, accessibility and the quality of the mineral available underground. In the Amazon case, the frequency of deposits with high mineral content has established the basis for fierce competition between different capitals, which ultimately seek to monopolize these non-reproducible resources in order to secure advantages that provide an extraordinary profit differential for the sector.
Iron ore mining in Vale's Northern System dates back to 1985 and is located in Carajás, in the state of Pará, and contains some of the largest iron ore deposits in the world. The mines are located on public lands for which the company has obtained exploration licenses. Due to the high grade (66,7% on average) of the deposits in the Northern System, there is no need to operate a concentrate plant in Carajás.
The beneficiation process consists only of measuring, screening, hydrocycloning, crushing and filtering operations. After this, the iron ore is transported by the Carajás Railway (EFC) to the maritime terminal in Ponta da Madeira, in the state of Maranhão.[ii]
In 2021, Vale's net profit was R$121,2 billion, an increase of 2021% compared to R$354 billion in 26,7, largely derived from the high differential income appropriated in the Carajás mines.[iii] The supplementary income can be seen as the difference between the production costs of the Carajás mines and the production costs of the Chinese mines, thus considering the 2010 values presented by Vale regarding Carajás, we have a difference of US$ 85.
In these terms, the greater the difference between production costs, the greater the supplementary profit resulting from Differential Income I, resulting from the quality of the ore and the possible scale of production, a central element to make the necessary logistics structure viable.
Another major mineral exploitation system is the production of aluminium, controlled by a small number of companies. From the end of the 1980s and during the 1990s, there was a movement of productive restructuring and spatial relocation in the aluminium industry. The initial movement was a deconcentration of production plants in the central countries, with production being significantly transferred to a group of countries that had the dual advantage of alternative energy sources to oil (hydroelectricity, coal, gas) and large bauxite deposits, among which Brazil, Venezuela and Australia stand out, among others.[iv]
Mineração Rio do Norte (MRN) had the participation of the Brazilian government, associated with foreign capital, in the implementation of mineral projects. At the end of 1971, Alcan began the implementation of the Trombetas project, which was soon suspended due to the crisis in the global aluminum market at the time. The postponement of the project culminated in the intervention of the Brazilian government to give it a go, and in June 1972, CVRD and Alcan began negotiations to establish a joint venture, aiming to resume the project (BUNKER, 2004). Thus, the Brazilian State, through CVRD, acquired 40% of the shareholding structure of MRN and took responsibility for the implementation of the project.[v]
The extraction and processing of metallurgical bauxite, carried out by MRN, constitutes the initial phase of the aluminum production cycle. The processing, which is intensive in electricity – the main cost component – also goes through an intermediate phase, the production of alumina carried out by Alunorte and, finally, primary aluminum, which is produced by Albrás. MRN supplies bauxite to the Barcarena (Alunorte/Albrás) and São Luiz (Alumar) complexes.
The limits of mineral extraction
The mineral extraction industry is known to have an environmental impact, as Penna (2009) points out: “mining is the activity that has shown the lowest level of social and environmental commitment compared to, for example, oil exploration”. Exploration in the Amazon follows international logic, with the aggravating factor that the extensive dynamics of the mining area tends to destroy a higher percentage of primary forest.
The Vale Company's iron exploration area in the state of Pará corresponds to a portion of the Carajás National Forest[vi], with exploration taking place on several fronts, the most significant being those of Parauapebas and Cannãa dos Carajás.
Several studies show that mineral extraction produces four perennial socio-environmental effects: (i) the destruction of the “canga” biome; (ii) deforestation and loss of biotic diversity; (iii) displacement and suffering imposed on traditional communities and populations; (iv) attraction and demographic concentration in nearby areas.
The canga is a complex and specific ecosystem of areas of iron germination, very similar to the cerrado, and includes a large variety of species from the families Asteraceae, Fabaceae, Cyperaceae, Bromeliaceae, Cactaceae, Orchidaceae, Convolvulaceae, among others. This environment is completely destroyed with the advance of mining, and the original area of the Carajás National Forest is gradually being completely reverted to mining. A collateral impact of the advance of mining is the destruction of the fauna that used to live in the region, as highlighted by the ICMBio study (2012, p. 23), this “environment of extreme selective pressures can result in a large number of endemic species with specific metabolic and anatomical adaptations”.
Deforestation and the loss of biotic diversity in the Amazon are accompanied by various processes of economic exploitation, and the literature on the subject provides basic information that, although livestock farming is the main direct cause of deforestation in the Amazon region, mining fronts represent an important vector of destruction of native forests.
The first years of the last decade were critical in terms of forest devastation in the Amazon, reaching 2005 thousand km² of deforested area in 19,01. In that year, the state of Mato Grosso alone was responsible for more than 40% of the total deforestation, followed by Pará (32%). Since that peak, the area has been gradually decreasing, reaching 6,6 thousand km² of deforested area in 2017, which is still very high. Mining and soybean production are the two main economic processes developed in these two federative units, respectively.
In the case of mineral extraction, the strong environmentalist discourse of the main companies in the sector contrasts with the actual devastating pattern of the same. It is worth noting that the complete mining cycle consists of three phases: (i) forest clearing, consisting of the removal of forest masses in the areas to be mined; (ii) extraction of laterite and exposure of the mineral deposit; (iii) abandonment of the current area and the opening of a new front. In some cases, mining companies rebuild a secondary forest, but with a huge loss of diversity.
Unlike mineral exploration in deep-sea mines, as seen in other countries, Amazonian exploration is carried out in the open pit and the mineral outcrop occurs eight meters above the ground. This means that exploration is carried out in an increasingly extensive area, with forest clearing being a permanent condition for the exploration cycle. In open-pit mines, after the forest cover is removed, drilling and detonation are carried out, removing a mass of sterile material, and then the ore is removed. Thus, the expansion of mineral extraction establishes, as in other accumulation fronts, a strong impact of forest deforestation.
In the main mining areas, both iron and bauxite, the impact on traditionally settled communities is enormous. In the study organized by Fernandes et al (2014, p. 17), the authors highlight that “water pollution and inadequate waste disposal, among other impacts, have caused damage to the local ecosystem”, and the impacts of mining projects installed in Pará affect different population groups, including 12 urban communities, 04 riverside communities, 07 quilombola and fishing communities, and 04 indigenous communities.
It is worth considering three impacts present in the exploration areas: (i) population displacement and accelerated demographic concentration; (ii) loss of economic, social and cultural subsistence capacity of traditional populations; (iii) different degrees of contamination and environmental degradation.
The intense population displacement and formation of new urban centers are notable and are largely the result of both the territorial changes imposed by the logistics necessary for the accumulation of mining capital, especially the Carajás Railroad, and the specific structure necessary for the exploration of mineral deposits, which gave rise to several municipalities, with the municipalities of Canaã dos Carajás, Água Azul do Norte and Parauapebas standing out for their significant recent demographic growth.
As data from the latest Demographic Census (2022) shows, the social indicators of mining municipalities are very precarious, highlighting both the high demographic expansion, as a result of the strong attraction that mining projects exert on surrounding populations, as well as the low capacity for qualitative transformation of the population's living conditions.
As Coelho (2008, p.248) highlighted, “with the exception of Parauapebas, the others lack several resources, including basic sanitation infrastructure to serve the population”. It is worth noting that even older municipalities such as Marabá have poor social indicators and strong recent population growth.
In general, the capacity of mining based on large transnational companies to positively modify the local socioeconomic reality has been the subject of analysis in several countries (FERNANDES et al, 2014), with the low capacity to establish social and economic “linkages” being recognized.
In the case of Pará, two aspects contribute to the enclave effect of mining: (i) tax relief that reduces the volume of taxes collected and reduces the capacity of state and municipal governments to intervene, especially considering the lack of federative principles that would protect transfers to replace losses; (ii) mineral royalties (Financial Compensation for Mineral Exploration – CFEM) are the lowest in the world (ranging from 0,2% to 3% on the net basis), which makes it impossible for state and local society to appropriate a portion of mineral income that is significant for establishing a local development agenda.
Of the municipalities considered above, only Parauapebas, Canãa dos Carajás, Oriximiná and Barcarena, as they are headquarters of the main mines in operation (N4D and SN11D, Trombetas) and the alumina/aluminum reduction plants, received a more significant volume of resources from mineral royalties; however, as we noted in another study (TRINDADE et al., 2014), given the current conditions of exploration and the absence of planning and tax policies, what will be seen is the growing precariousness of social indicators and the absence of projects for when the mines are exhausted.
On the other hand, research carried out in the region demonstrates how the appropriation of land by large mining companies has led to the complete dispossession of traditional populations, with the dynamics of what Harvey (2008) calls accumulation by dispossession becoming very visible in these processes, whether due to the loss of economic, social and cultural subsistence capacity of these traditional populations, or due to their use in complementary and necessary production processes for mineral extraction, such as, for example, the use of labor in conditions analogous to slavery in the production of coal for use in the region's pig iron industries.
Indigenous populations were the most affected by the set of projects that came to be called the Grande Carajás Program (PGC), with the Carajás Iron Project, the Trombetas Project (MRN), Albrás-Alunorte (Barcarena), Alumar (São Luís) and the Tucuruí HPP, constituting the core of the PGC and affecting a group of diverse indigenous peoples from the 1970s onwards, with the following standing out for the degree of impact: Apinayé (Tocantins); Gaviãoparkatêjê, Parakanã, Suruí and Kayapó-Xikrin (Pará); Gavião-Pukobyê, Guajá, Guajajara, Krikatí and Urubu-Kaapor (Maranhão) and the Awáe Krikati indigenous lands that had not yet been demarcated, as well described in the recent work of Juliana Neves Barros (2024).
The technical reports by Iara Ferraz (1983, 1984) for FUNAI/CVRD still constitute important documentary evidence of the exploitative epic of big capital, together with state intervention, over these populations that had no capacity for defense. Thus, the Tucuruí Hydroelectric Power Plant power line destroyed the old village of Gaviões, who were transferred to a new village located less than 10 kilometers from the Carajás railroad, further weakening this population (FERRAZ, 1984).[vii]
Final considerations
Several deleterious effects are established as part of this dynamic, which we identify and address in a first approximation: (i) population displacement and accelerated demographic concentration; (ii) loss of economic, social and cultural subsistence capacity of traditional populations; (iii) different degrees of contamination and environmental degradation.
The data presented, as well as consideration of the impacts on local communities, deforestation and low economic interaction with regional production systems, lead us to the conclusion that the mineral extraction industry will necessarily have to be regulated through more effective tax and royalty policies, as well as being subject to stricter environmental monitoring standards.
Unfortunately, the current Brazilian situation points to a far from promising scenario, with the destruction of social and environmental rights that affect the communities most affected by these projects and a growing loss of national sovereignty.
*Jose Raimundo Trinidad He is a professor at the Institute of Applied Social Sciences at UFPA. Author, among other books, of Agenda of debates and theoretical challenges: the trajectory of dependency and the limits of Brazilian peripheral capitalism and its regional constraints (Paka-Tatu).
Reduced version of the article published in Notebooks of the Regional Development Observatory, organized by Zulene Muniz Barbosa. São Luís, EDUEMA, 2024.
References
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BNDES. LARGE MINING CORPORATIONS: GROWTH STRATEGY. Sector Bulletin No. 45, April (2001b).
BUNKER, Stephen G. The spatial and material factors of production and global markets. New NAEA Notebooks, vol. 7, n° 2, pp. 67-107, Belém: NAEA, Dec. 2004
PRO-INDIAN COMMISSION OF SÃO PAULO. Mining expansion threatens quilombola territories, 2015. Available here.
FERNANDES, Francisco Rego Chaves; ALAMINO, Renata de Carvalho Jimenez; ARAÚJO, Eliane (Eds.). Mineral resources and community: human, socio-environmental and economic impacts. Rio de Janeiro: CETEM/MCTI, 2014.
FERRAZ, Iara. Double impact: the Carajás Project and the “support projects” for the Gaviao and Surui indigenous communities of Pará. Collection of the Indigenous Work Center, 1984. Available here .
HARVEY, David. The New Imperialism. New York: Oxford University Press, 2005.
CHICO MENDES INSTITUTE FOR BIODIVERSITY CONSERVATION (ICMBio). THE ADVANCE OF MINING IN THE CARAJÁS NATIONAL FOREST, PARÁ VERSUS THE CONSERVATION OF THE CANGA ECOSYSTEM. In: It's Not Worth It: doubling private profits and collective impacts, 2012. Available here.
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MINING IN RIO DO NORTE. Annual Report. Rio de Janeiro, 1995-1996.
OSÓRIO, J. Latin America: the new export pattern of productive specialization: a study of five economies in the region. In: FERREIRA, C.; OSÓRIO, J.; LUCE, M. (Orgs.). Capital reproduction patterns: contributions from the Marxist dependency theory. Sao Paulo: Boitempo, 2012.
PENNA, Carlos Gabaglia. Effects of mining on the environment. In: ((o))eco: Environmental Journalism. Available at: http://www.oeco.org.br.
TRINDADE, JRB The metamorphosis of work in the Amazon: beyond Rio do Norte Mining. Belém: UFPA/NAEA, 2001. 171 p.
TRINDADE, José Raimundo Barreto; OLIVEIRA, Wesley Pereira de; BORGES, Gedson Thiago do Nascimento. The Mineral Cycle and the Urgency of Local Development Policies: the case of the municipality of Parauapebas in the Southeast of the State of Pará. Public Policy Magazine, São Luís, v. 18, n. 2, p. 603-18, 2014.
Notes
[ii] In the case of iron ore, for example, it should be noted that world reserves reach 310 billion tons, with Brazil holding 6,1% of this total, behind China and Australia. However, “considering the high iron ore content of 64% on average, the country has a different position in view of the average content of 59% obtained in Australia, compared to less than 40% in China” (BNDES, 2001). It is worth noting that the largest concentration of iron on the planet is found in the Amazon, the mineral province of Carajás, whose reserves total more than 17 billion tons and have a high Fe content.2O3, reaching 66%.
[iii] Check Vale's Administrative Report. Access here.
[iv] Brazil accounts for 9,4% of total world production, with MRN accounting for 65,82% of this total. The largest world producers are: Australia (36,3%); Guinea (15,7%); Jamaica (10,4%); Brazil (9,4%).
[v] MRN's shareholding structure has been in effect since the 1970s, when its shareholders' agreement was signed, dividing the company between: Vale (40%), BHP Billiton Metais (14,8%) Rio Tinto Alcan (12%), Companhia Brasileira de Alumínio – CBA (10%), Alcoa Brasil (8,58%), Norsk Hydro (5%), Alcoa World Alumina (5%) and Abalco (4,62%). Recently (2011) Vale sold its stake in MRN and other companies in the aluminum sector, see Vale's Annual Report (2012).
[vi] The Carajás National Forest is a federal environmental conservation area in Brazil located in the southern state of Pará. It is administered by the Chico Mendes Institute for Biodiversity Conservation (ICMBio) and is currently granted to the company Vale S.A. It has just under 412 thousand hectares and was created by decree 2.486 of February 2, 1998. Mineral exploration is permitted within the protected area. See: http://pt.wikipedia.org/wiki/Floresta_Nacional_de_Caraj%C3%.
[vii]It is worth noting that the dyed indigenous peoples have resisted with various forms of social struggles, for example, in 2003, Indians from the Gavião tribe blocked the EFC, causing the interruption of Vale's activities (FERNANDES et al., 2014, p. 46-47)
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