Mining in the Amazon

Image: Leonid Danilov
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By JOSÉ RAIMUNDO TRINDADE*

Social and environmental degradation

In recent decades, the presence of large mineral capital in the Amazon has become the economic tonic of the region, with these mostly transnational companies operating the international flows of production and transaction of the main strategic mineral commodities. The shareholding composition of these companies is formed by the three main economic agents of capitalist modernity: State, financial capital and industrial capital, national and international.

The mineral sector concentrated in the eastern Brazilian Amazon (Pará and Amapá) is of great importance for the regional and national productive dynamics, given, including, the strategic character for the current accumulation of Brazilian capital represented by the mineral reserves found there, and by the deep social impacts and environmental impacts that mineral exploration causes in the region. Mineral exploration corresponds to almost 75% of the export basket of the state of Pará, the largest economic segment of the state's GDP (Gross Domestic Product) and one of the most significant in the region as a whole.

In less than three decades, the state of Pará has become the second largest national mineral producer, second only to Minas Gerais, which has been developing large-scale mining for more than a century. Approximately 80% of the 20,6 billion dollars generated by Pará's total exports in 2020 are due to the mineral extractive industry, which makes the mineral sector the flagship of Pará's exports, with iron alone accounting for 68% of total exports. exports (Comexstat, 2021)[I].

The mineral sector has historically constituted a strongly monopolized segment, especially in the iron ore and aluminum (bauxite) segments, which is partially due to three aspects that made possible a strong concentration and centralization of capital: i) the spatially limited monopolistic capacity of appropriating the mineral potential; ii) the technological capacity to operate, especially in the long-haul and scale transport industry (rail transport logistics and ocean navigation) and; iii) the intricate relationship between sector 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 seaborne market: Companhia Vale, Companhia Rio Tinto and BHP Billiton. The primary aluminum segment is controlled by the so-called “six sisters”, with some structural changes occurring in the last two decades: Alcoa, Alcan, BHP Billiton, Norsk Hydro, Pechiney and Comalco, the first two of which are integrated producers of the raw material (bauxite) to final goods. In the case of the Amazon, the two main mineral exploration segments, iron and aluminum, are respectively controlled by the transnationals: Companhia Vale and Norsk Hidro, with the presence of Alcan and Alcoa.

Primary-exporter specialization pattern

The contemporary capitalist system includes several territorial reproduction spaces, making up a globalized reproductive dynamics. The Amazon constitutes one of these local spaces of capitalist exploitation, a territory of expansion of accumulation that has undergone a strong economic reconfiguration throughout the different cycles of Brazilian capitalist development during the XNUMXth 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 breakdown, with enormous deepening in these last five years.

In recent decades, a new relational disposition with world capital has been increasingly established throughout Latin America. This pattern of capitalist development, centered on some common axes, was generalized in several countries on the continent, establishing “neoextractivism” as the center of an “export pattern of productive specialization”[ii], as already observed by us in another text published here, we would be in a “fourth form of dependence” (see: https://aterraeredonda.com.br/a-quarta-onda-da-dependencia-brasileira/).

The main common components identified in countries like Brazil, Argentina, Colombia, for example, can be systematized into four elements that appear in different degrees in each of these countries: i) exhaustion of economic growth based on industrial diversification or growing reprimarization of the economic structure of these countries; ii) the established neoextractivist base determines an intensive and growing plundering of nature as the basis of this new dynamic of capital expansion; iii) the mass of use values ​​produced are destined for the international market, re-establishing a reproduction pattern of primary-export specialization; iv) the so-called “spillover effect” is observed[iii] of mineral and agrarian production, an effect referring to changes in environmental norms and procedures, with increasing degradation of local populations, environmental destruction and dismantling of regulatory institutions, all of which is seen very objectively in the current period and in the destructive capacity of Minister Salles.

By pattern of reproduction of capital we mean the capitalist social and economic formations that are established nationally, comprising, on the one hand, varying degrees of dependence on the circuit of the capitalist world economy, on the other hand, greater or lesser development and technological autonomous expansion, credit and sovereign power of your national state. This set of variability establishes quite different capitalist societies, which conditions international economic relations and at the same time defines the role of these societies in the international division of labor, as well as the degree of integration of the various economic circuits present in their internal dynamics.

The reproduction pattern of capital integrates the set of reproductive circuits[iv], and a certain pattern of reproduction is established as a structural form that integrates productive, credit and commercial circuits within a territory or base of national development. The interaction between this pattern of national reproduction and the capitalist world economy is one of the central aspects for understanding the productive relations between transnational capitals and their interventions in specific locations such as the Brazilian Amazon.

In this context, two aspects are important: i) the role of Amazonian mineral production in the current logic of Brazilian development, centered on growing economic reprimation and; ii) the high level of environmental degradation produced by forms of established neo-extractive mineral exploitation, forms of accumulation by dispossession.

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[v].

These forms of spoliative accumulation[vi] they are very diversified, but they have a common point: they are 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 explored in the region.

The specific conditions for the expansion of the Amazonian mineral industry take place with the expulsion of diverse populations from their original territories, as well as with a high environmental cost in the region. On the other hand, the privatization of state-owned companies such as Companhia Vale in the 1990s, alongside huge forest areas devastated to guarantee mineral exploration, are elements that collaborate in identifying the current neoextractive cycle as a process of accumulation by dispossession.

The transnational mineral capital in the Amazon

The fact that the Amazon fulfills the role of repository of primary use values ​​for big capital configures a situation in which this vast territory enables a dual role, on the one hand, it guarantees a gigantic mass of exportable values ​​and that favors the balance of payments, via exports to the national economy, on the other hand, the low costs of mining production enable gains for transnationals in the sector that operate in the region, whether due to the quality of the ore, or the enormous transfer of extraordinary income from the mines and the logistics, almost all of which are provided by the Brazilian State and now taken over by transnational companies.

The mineral sector has historically constituted a strongly transnationalized segment, especially in the iron ore and aluminum (bauxite) segments, which is partially due to three aspects that made possible a strong concentration and centralization of capital, two of them already listed above: i) the spatially limited monopolizable capacity appropriation of mineral potential; ii) the technological capacity to operate, especially in the long-haul and scale transport industry (rail transport logistics and ocean navigation) and; iii) the intricate relationship between sector 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 seaborne market: Companhia Vale, Companhia Rio Tinto and BHP Billiton. The primary aluminum segment is controlled by the so-called “six sisters”, with some structural changes occurring in the last two decades: Alcoa, Alcan, BHP Billiton, Norsk Hydro, Pechiney and Comalco, the first two of which are integrated producers of the raw material (bauxite) to final goods.

The process of occupation of the Amazon by large transnational capital would not have taken place so successfully if the Brazilian State had not acted as a mediator for the internationalization of multinational companies, so that the Brazilian State prepared the right environment for the installation of large monopoly capital, in this sense. , it is highlighted that the fallacious action of the Brazilian state, through the doctrine of national security, sought to occupy the Amazon, disseminating the ideology that they were occupying an “empty space”. Therefore, in many senses the Brazilian government acted in favor of the interests of monopoly capital, to the detriment of national and social benefits.

For all this, it appears that national investments and, mainly, foreign investments, guided by the Brazilian State over the last six decades, ensured the insertion of monopoly capital in the region, and much more than that, guaranteed capital accumulation on an enlarged scale. But recently, it can be highlighted that the role of the mining sector in the Amazon amounts to a leading role considering the volume of exports and their participation in relation to the Gross Domestic Product (GDP) of the region, however, in the with regard to a better distribution of income from mineral exploration to local society, very little has been contributed.

Social and environmental degradation

The mineral extraction industry has a recognized environmental impact, combined with the low level of social and environmental commitment, and 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 forest primary. The environmentalist discourse of the main companies in the sector contrasts with its effective devastating pattern. It is worth noting that the complete mining cycle consists of three phases: i) forest clearing, consisting of the removal of forest massifs in the areas to be mined; ii) laterite extraction and exposure of the mineral deposit; iii) the abandonment of the current area and the opening of a new front. In some cases, mining companies reconstitute a secondary forest, but with a huge loss of diversity.

In the main mining areas, both iron and bauxite, the impact on traditionally settled communities is enormous. Water pollution and inadequate waste disposal, among other impacts, have destroyed the local ecosystem, and the impacts of mineral projects installed in Pará affect different population groups, urban communities, riverside communities, quilombola communities and 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.

On the other hand, the appropriation of land by large mining companies established the complete dispossession of traditional populations. This accumulation by dispossession becomes very visible in these processes, either because of the loss of economic, social and cultural subsistence capacity of traditional populations, or because of its use in productive processes that are complementary and necessary for mineral extraction, such as, for example, the use of work in conditions analogous to slavery in the production of charcoal for use in the region's pig iron industries.

The indigenous populations were the most affected by the set of projects that came to be known as the Grande Carajás Program (PGC), with Ferro Carajás, the Trombetas Project (MRN), Albrás-Alunorte (Barcarena), Alumar (São Luís) and the Tucuruí HPP, constituted the core of the PGC and reached a diverse group of indigenous peoples from the 1970s onwards, standing out for the degree of Apinayé impact (Tocantins); gaviãoparkatêjê, parakanã, suruí and kayapó-xikrin (Pará); gavião-pukobyê, guajá, guajajara, krikatí and urubu-kaapor (Maranhão) and the Awá and Krikati indigenous lands that were not yet demarcated[vii].

However, in the case of the social indicators of the municipalities directly linked to mineral exploration, be it iron or bauxite, the data demonstrate precariousness and social spoliation. Thus, for example, in the aluminum complex, the monthly household income in more than half of the households is only ½ the minimum wage, configuring an extremely precarious social reality, which is complemented by the data that more than 70% of households do not have proper sanitary adequacy and that Tucuruí, for example, has 14 subnormal agglomerations, that is, population agglomerations with characteristics of slums or precarious conditions of urbanization.

The data indicate that the ability of mining, as an economic activity, to provide quality of life for local populations is quite questionable, and the economic model centered on mineral and agrarian exports, without proper fiscal and social regulation, which allows revenue to municipalities and the state to offer better urban infrastructure conditions make mining fundamentally an economic enclave activity, however externalizing several negativities, mainly environmental ones. Unfortunately, the current Brazilian situation points to an unpromising 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 Graduate Program in Economics at UFPA. Author, among other books, of Criticism of the Political Economy of the Public Debt and the Capitalist Credit System: a Marxist approach (CRV).

Notes


[I] Check: http://comexstat.mdic.gov.br/pt/comex-vis.

[ii] 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.

[iii] GUDYNAS, Edward. Transitions to post-extractivism. Meanings, options and scopes. In: FILHO, Jorge P.; LANG, Mirian; DILGER, Gerrhard (Ed.). Decolonize the imaginary. São Paulo: Rosa Luxemburgo Foundation, 2016.

[iv] MARX, K. Capital: critique of political economy, Book II: The process of capital circulation [1885]. São Paulo: Boitempo, 2014.

[v] TRINDADE, JRB; OLIVEIRA, WP de. Primary specialization pattern: exporter and dependence dynamics in the period 1990-2010, in the Brazilian economy. FEE tests, Porto Alegre, v. 37, no. 4, Mar. 2017. p. 1059-1092.

[vi] HARVEY, David. The New Imperialism. Sao Paulo: Loyola Editions, 2005.

[vii] 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.

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