Chronicle of the Amazon Spoliation

Image: Julia Volk
Whatsapp
Facebook
Twitter
Instagram
Telegram

By JOSÉ RAIMUNDO TRINDADE & GEDSON THIAGO BORGES*

The generation of new wealth created by Vale SA corresponds to the implementation of mechanisms for the production and appropriation of surplus value

“The drums of the night / are calling. They call / call me. (Max Martins, Collected Poems)

The most striking feature of the Brazilian economy in these first decades of the XNUMXst century corresponds to the growing process of reprimarization of its economy and the growing spoliation of its natural resources. The center of the current economic dynamics is associated with the production of commodities minerals and agriculture. Furthermore, the reduction of the industrial sector, in the composition of the Gross Domestic Product (GDP) of Brazil, has been reinforcing in recent years the continuity of a gap in the stages of engineering and technological production in the country, and the situation of the national industrial sector worsens even more so by establishing a fragile base for promoting technological intensity.

The result of a process linked to the reconfiguration of global capitalism that has lasted four decades, has pushed the Brazilian economy into a fourth cycle of dependence, linked to the subordination of the cycle of appreciation of the international demand for primary and basic goods. At the same time, the dynamics of capital accumulation on a global scale have created, in recent decades, a high degree of integration of international exchanges, establishing greater commercial intersection through the reduction of customs barriers and exchange rate liberalization.

Economic reprimarization is more evident in economies that have reached a higher degree of industrial complexity, as is the case in 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.

The combination of these factors allowed observing the growing formation of the Brazilian mineral sector in one of the exporting centers of commodities national, with emphasis on the multinational mining company Companhia Vale, resulting from the privatization process in the 1990s that transferred not only part of the Brazilian mineral wealth to international private interests, but also strategic conditions for any base of national autonomous development.

The Brazilian export basket is dominated by the presence of primary items such as soy, crude oil, sugar cane, beef, corn, with emphasis on iron ore, which occupies a leading position among the main products exported by Brazil . In the period from 2015 to 2019, the mineral production of iron in Brazil corresponded to an accumulated 2,1 billion metric tons. For most of this period, Brazilian iron ore production was dominated by the mining company Vale, and in the four-year period 2015 - 2018, about 80% of the national production of iron ore corresponded to the mineral production of that company, as can be seen in the graph below.

Graph 01 Participation of Vale SA in the mineral production of iron in Brazil, 2015 to 2019 in %

Source: National Mining Agency. Own elaboration (2022).

The decrease in the participation of Companhia Vale in Brazilian iron production in 2019 is connected to the rupture of the dam in Brumadinho (MG) in January 2019. Furthermore, this reduction in the mineral production of this company also expresses the reverberation of the problems arising in the rupture of the Fundão dam in Mariana (MG), which occurred in November 2015, at the mining company Samarco (joint-venture between Vale SA and the Anglo-Australian BHP Billiton).

The intersection between the collapse of the two dams of the mining company Vale can be understood in the measures to intensify accumulation, that is, the imposition of a forced march to achieve high profit rates, combined with the reduction of expenses with maintenance and security.

Regarding the last aspect, the decrease in investments in maintenance and safety has been systematically reduced. In the period from 2014 to 2017 there was a reduction of US$ 600 million, which represented a departure from a level of US$ 2,8 billion to US$ 2,2 billion, respectively. A detailed assessment of these investments in maintenance and safety points out that, in the years 2014 to 2017, the resources destined to “tailing piles and dams” suffered a brutal reduction of 57%, so that the US$ 474 million were reduced to US$ 202 million (BELLUZZO; SARTI, 2019).

The reduction in investments in maintenance and safety has weakened the containment structure of the dams, in two respects. First, the reduction of these resources perpetuated the use of upstream dams, the type of dam used in Mariana (MG) and Brumadinho (MG), where the construction of the dam consists of using the mining tailings themselves, which are positioned in a of steps over the initial dike, the cheapest, but the most dangerous and passive method of failure. Secondly, the decrease in maintenance and safety resources premeditatedly made it impossible to modernize the dams, making it impossible to use safer methods to contain the decantation lakes, such as the downstream and center line methods (THOMÉ; PASSINI, 2018).

Despite the negative effects resulting from the collapse of Vale SA's dams, the mining company maintained its net revenue levels on a growth path, as shown in the graph below.

Vale Company Net Revenue 2015/2020 (in millions – current values)

Source: Financial and Operating Report, various years. Own Elaboration (2022).

The multinational Vale SA is the largest diversified mining company in the Americas and is part of the select group of big three, along with BHP Billiton and Rio Tinto. However, it should be noted that, with the growing participation of the mining company Fortescue, the iron ore sector has been dominated and transformed into a group called big oven. The intense pace of growth in Vale SA's capital accumulation can be translated by data related to the growth of the mining company's net revenue, which in 2020 recorded net revenue above R$ 200 billion. It is important to highlight that the pace of intensification of accumulation gained a greater momentum in the period from 2019 to 2020, with a jump from R$ 148 billion to R$ 208 billion.

However, it should be noted that the generation of new wealth created by Vale SA corresponds to the implementation of mechanisms for the production and appropriation of surplus value. In this sense, the high levels of net revenue achieved by Vale SA, in its genesis, are related to the high number of outsourced workers and the low salary mass that Vale SA pays to its own workers.

According to confirmation from workers' unions linked to mining, currently, the outsourcing process has supplanted the number of own workers. And the following situation has occurred in a usual way: dismissal of the company's workers to occupy and perform the same function as outsourced workers, with a lower salary and without benefits, which even cease to be extended to their family members. The ratio between the level of salaries paid to operational and administrative positions is much lower when compared to the level of remuneration received by senior management at Vale SA The table below illustrates this understanding.

Compensation of the Executive Board and Employees of Companhia Vale

Source: (Belluzzo; Sarti, 2019, p.13)

Thus, it is emphasized that the process of expanded capital appreciation of Vale SA is supported by the lowering of wages for its own and outsourced workforce. Thus, the intensification of the capital appreciation of Mineradora Vale SA, combined with the decrease in investments in maintenance and safety, reveals a facet of the problem, which culminated in the programmed ruptures of the dams.

Therefore, the continuity of this mineral extraction and exploration model, with a focus on increasing revenue at any cost, raises the alarm about the possibility of new dam failures, with irreversible environmental and human losses. It is worth noting that several countries have revised their positions regarding the issue of renationalizing the exploitation of natural resources and essential public services. France, Germany, Argentina, Canada and Hungary, have renationalized public services for water supply, solid waste collection, energy and transport, in addition to the logic of keeping strategic segments, such as mining and oil, under national and public control.

Defending the renationalization of Companhia Vale, not necessarily in reestablishing CVRD (Companhia Vale do Rio Doce), but in something more necessary to the social and economic interests of Brazilian national sovereignty becomes essential, especially if we consider the wealth of natural resources that the mines Amazonian forests make possible and that their spoliation leads to complete environmental destruction and the growing impoverishment of our population, vis-à-vis the wealth and gains provided for half a dozen international and national controllers of the current Vale Company.

*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 dependence (Pakatatu).

*Gedson Thiago Borges He holds a PhD in Economic Development from the Federal University of Pará (UFPA).

 

References


Luiz Gonzaga Belluzo and Fernando Sarti. “Vale: A financialized company”. The Diplomatic World: Observatory of Contemporary Economy. Osasco (SP), v. 139, Feb. 2019. Available at:https://diplomatique.org.br/vale-uma-empresa-financeirizada>.

José Raimundo Barreto Trindade. Transnational corporations, territoriality and environmental impacts in the eastern Brazilian Amazon region. In: CONGILIO, Celia R.; BEZERRA, Rosemayre, MICHELOTTI, Fernando. Mining, work and Amazon conflicts in southeastern Pará. Marabá (PA), Publisher: iGuana, 2019.

See this link for all articles

10 MOST READ IN THE LAST 7 DAYS

______________
  • About artificial ignoranceEugenio Bucci 15/06/2024 By EUGÊNIO BUCCI: Today, ignorance is not an uninhabited house, devoid of ideas, but a building full of disjointed nonsense, a goo of heavy density that occupies every space
  • Franz Kafka, libertarian spiritFranz Kafka, libertarian spirit 13/06/2024 By MICHAEL LÖWY: Notes on the occasion of the centenary of the death of the Czech writer
  • Introduction to “Capital” by Karl Marxred triangular culture 02/06/2024 By ELEUTÉRIO FS PRADO: Commentary on the book by Michael Heinrich
  • The society of dead historyclassroom similar to the one in usp history 16/06/2024 By ANTONIO SIMPLICIO DE ALMEIDA NETO: The subject of history was inserted into a generic area called Applied Human and Social Sciences and, finally, disappeared into the curricular drain
  • Impasses and solutions for the political momentjose dirceu 12/06/2024 By JOSÉ DIRCEU: The development program must be the basis of a political commitment from the democratic front
  • Strengthen PROIFESclassroom 54mf 15/06/2024 By GIL VICENTE REIS DE FIGUEIREDO: The attempt to cancel PROIFES and, at the same time, turn a blind eye to the errors of ANDES management is a disservice to the construction of a new representation scenario
  • The strike at federal Universities and Institutescorridor glazing 01/06/2024 By ROBERTO LEHER: The government disconnects from its effective social base by removing those who fought against Jair Bolsonaro from the political table
  • A myopic logicRED MAN WALKING _ 12/06/2024 By LUIS FELIPE MIGUEL: The government does not have the political will to make education a priority, while it courts the military or highway police, who do not move a millimeter away from the Bolsonarism that they continue to support
  • Hélio Pellegrino, 100 years oldHelio Pellegrino 14/06/2024 By FERNANDA CANAVÊZ & FERNANDA PACHECO-FERREIRA: In the vast elaboration of the psychoanalyst and writer, there is still an aspect little explored: the class struggle in psychoanalysis
  • Volodymyr Zelensky's trapstar wars 15/06/2024 By HUGO DIONÍSIO: Whether Zelensky gets his glass full – the US entry into the war – or his glass half full – Europe’s entry into the war – either solution is devastating for our lives

AUTHORS

TOPICS

NEW PUBLICATIONS