Three years of Brumadinho

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By JOÃO CARLOS LOEBENS & ARTHUR HARDER KINGS*

The exploitation of mineral resources in Brazil has been an instrument of abusive accumulation of capital, leading to tragedies such as that of Vale in Brumadinho

“The gold that was extracted from there in large quantities generated more wealth in Europe than in Portugal, and more in Portugal than in Minas, where the fortune that remained was concentrated in the hands of a few, following the formula still dear to our hearts today. elites. As one author said, “amid so much wealth, we started to be poor” (Laura de Mello e Souza, Poor, Rude and Menacing).

“On Brazilian soil, nothing remains of the dynamic impulse of gold, except for churches and works of art. […] In foreign hands, iron will leave nothing but what gold has left” (Eduardo Galeano, The open veins of Latin America).

“Our motherland slept / Our motherland was so distracted / Without realizing that she was subtracted / In dark transactions” (Chico Buarque, Will pass).[1]

The Vale tragedy in Brumadinho completed three years this past January 25th. In the long run, one can understand that Vale's tragedy in Brumadinho is not a surprise. The excerpts that open the text are able to demonstrate this finding, not so much by indicating precedents (even so, let's remember Mariana in 2015), but by indicating that mining, as practiced over these more than 300 years, going back still in the XNUMXth century, it is characterized by its essential trait: to impoverish Brazil. As the author quoted by Laura de Mello e Souza says: “in the midst of so much wealth, we started to be poor”.[2]

As Eduardo Galeano recalls, if gold bequeathed us nothing more than some beautiful churches and works of art, it is difficult to imagine that iron and the like, following these same well-known paths, will be able to do something different: history repeats itself and the scenario is even more desolate.

Let us recall, first, the 1710th century Minas, a place that for so long populated the imagination of adventurers and which, when discovered, brought happiness to the Portuguese Crown. Despite the abundance of gold, the picture was ambiguous, according to Laura Vergueiro, “when the captaincy of Minas Gerais knew its apogee, thousands of men lived in misery, starved, wandered aimlessly through the camps, sad deteriorated fruits of a system sick economy and a violent power structure”. The concentration of wealth around the extraction of gold was the rule, in 47, for example, only five people were responsible for XNUMX% of all the gold produced in the Intendency of Rio das Mortes.

For Angelo Carrara, this situation was no exception: despite gold having fostered, albeit on more ephemeral than permanent bases, the internal market based on transport, pastoral and agricultural activities, mining in the mines of the XNUMXth century, based on in slave labor and under the aegis of the Crown, did not result in substantial gains for the Colony or for the region. As a result of the scarcity of gold, “the whole system was thus atrophied, losing vitality, to finally disintegrate into a subsistence economy”. In Celso Furtado's assessment, the potential and possible manufacturing development from the extraction of gold wealth did not materialize, being the first chapter of a long history of exploitation and national impoverishment.[3]

In more recent times, Getúlio Vargas and the industrializing impetus of his government placed mining once again in a prominent role in the Brazilian economic scenario. From the 1940s, the federal government implemented a more aggressive policy in the area of ​​mineral exploration. The so-called heavy or base industry, including steel, was an essential part of industrialization. The creation of Companhia Siderúrgica Nacional in 1941 and Companhia Vale do Rio Doce in 1942 are examples of the nationalist and developmentalist project of that time. In this way, “pretensions that the Itabira Iron Ore Company held in Brazil, pretensions contested by politicians and intellectuals since the First Republic”.

If, on the one hand, Varguista efforts had indicated the national-developmentalist direction of Brazilian mineral exploration, on the other hand, the issue was not entirely resolved. Two decades later, between the 13th and 18th of January 1964, for example, at the “Popular Week in Defense of Ore” held in Belo Horizonte, in the words of Ana Moraes, “the unbridled export of Brazilian mineral resources, denouncing what would be a 'colonialist' action by multinationals”. In this wake, some concrete impacts were felt by multinationals, the “Hanna case” being a well-known example.

A Parliamentary Commission of Inquiry, based on reports that indicated irregularities in exploration by the US company, revoked the company's mining rights and promoted the nationalization of the mines. In April 1964, however, “the bill arrived” through the business-military coup d'état, supported by large mining groups, which overthrew President João Goulart and his reformist project. With the dictatorship, in the evaluation of Ricardo Bueno, a good part of the mining sector was the target of intense private and foreign exploration, contributing to the Brazilian “conservative modernization” (read: income-concentrating modernization).[4]

In the years 1990-2000, with the dawn of the 1997st century, the scenario changed little. The privatization of Vale, carried out during the Fernando Henrique Cardoso government, is undoubtedly a suspicious operation, since, as they say, the Brazilian state-owned company was sold “at a bargain price”. The prosperous and profitable public company Vale became the object of appetite of large national and international economic groups, being privatized in the FHC government in May 3,3, for the price of 200 billion dollars, an amount considered scandalously low (in addition to the BNDES having financed at subsidized interest/paid a good part), since the evaluation of the ore reserves could raise the value to approximately XNUMX billion at the time.

One of the alleged reasons for privatization was to reduce the external debt, but the money was used in current expenses and parliamentary demands. In the 21 years of privatization, the owners/shareholders, who bought for 3,3 billion using BNDES resources, received no less than R$ 320 billion in profits and dividends! In the first 3 quarters of 2021, Vale had a net profit of US$15,8 billion, with the company being purchased for US$3,3 billion. That is, the profit for the first 9 months of last year was 5 times greater than the amount paid for the purchase of the company! A good part of the 3,3 billion of the purchase was paid by the BNDES (subsidized financing) and with “rotten bonds”, generously received by the federal government. Is there a worse deal than this for Brazilian society?

In addition, there are many complaints of irregularities in the privatization operation, as demonstrated by journalists Amaury Ribeiro Jr and Aloysio Biondi. As if the absurdities and tragedies were endless, even today, to aggravate the situation, Vale, via manipulation of transfer prices and the use of companies offshore in countries or territories considered “fisco-criminal hideouts” (usually called tax havens), it increasingly contributes to the maintenance of “mining that impoverishes Brazil”: the ore leaves the country in its raw state (without local industrialization), underinvoiced (evading taxes), is extracted in an often irregular and predatory manner, normally causing damage to local communities, and, in the end, is reimported in the form of steel for internal consumption at much higher values, failing to generate jobs, income and wealth in Brazil. The song is still up-to-date: “It slept / Our motherland was so distracted / Without noticing that it was subtracted / In dark transactions”.[5]

Vale's tragedy in Brumadinho, which now completes three sad years, seen from the historical perspective of the long duration, demonstrates the continuity of a model of mineral exploration that, despite the obvious changes over the centuries, still remains the same as the colonial exploitation of past centuries. Born within colonial slavery, mineral exploration in Brazil adapted so well to our peripheral capitalism. It is a model in which lives are discarded in favor of the unrestricted accumulation of capital, both local and foreign.

It is in this context that problems arising from this predatory mineral exploration can also be understood: the environmental devastation, so common in mining megaprojects, the impoverishment of communities and territories/countries where mineral exploration is carried out, and the contempt for any popular project to democratize these resources and the like. Mineral resources end up being transformed into barriers and obstacles to the ultimate purpose of mining, that of generating wealth and well-being for the population, becoming what they currently are: an instrument of abusive accumulation of capital.

May the tragedy of Vale in Brumadinho lead us down different paths, towards a different relationship with mining and the environment, so that there are no more lives liable to be “erased” by the negligence of large corporations in the name of unrestricted accumulation and abusive capital through the generation of profits at any cost. In short, that we find another model to live by.[6]

*Joao Carlos Loebens is a doctoral student in economics and tax auditor at the State Revenue Service of Rio Grande do Sul.

*Arthur Harder Reis is a history major at the Federal University of Rio Grande do Sul (UFRGS).

 

Notes


[1] The excerpts from the epigraph are, respectively: MELLO E SOUZA, Laura. "Poor, rude and menacing". In: FIGUEIREDO, Luciano. (org.). History of Brazil for the occupied. Rio de Janeiro: LeYa, 2013. p. 316; GALEANO, Eduardo. The open veins of Latin America. Porto Alegre: L&PM, 2018. p.88-89; Chico Buarque, Will pass, composition: Francis Hime and Chico Buarque, 1984.

[2] A more in-depth and detained argument was made by us in: LOEBENS, João; KINGS, Arthur. The mining that impoverishes Brazil. In: MELÉNDEZ, G; CANO, J; BOLIVAR, H. (eds.). Neoextractivism territories and indigenous rights in Latin America. Durango: Ed. Universidad Juárez del Estado de Durango, 2021. Available online.

[3] See VERGUEIRO, Laura. Opulence and misery of Minas Gerais. São Paulo: Brasiliense, 1981. p. 74-75; CARRARA, Angelo. Fool's gold. In: FIGUEIREDO, L. Op cit., P. 153; FURTADO, Celso. Brazil's economic formation. Brasilia: Ed. Unb, 1963. p. 108.

[4] About CVRD and CSN, see: Creation of Companhia Vale do Rio Doce. FGV-CPDOC, s. d; CSN, a political decision. FGV-CPDOC, sd Both available online. For the following period, see: MORAES, Ana. The miners and the conquest of the State: from the “Hanna case” to the 1964 coup. In: CAMPOS, Pedro; BRANDÃO, Rafael; LEMOS, Renato. (orgs). Entrepreneurship and dictatorship in Brazil. Rio de Janeiro: Consequence, 2020; BUENO, Ricardo. The ABC of delivery in Brazil. Petrópolis: Voices, 1981.

[5] See, respectively: BIONDI, Aloysio. Privatized Brazil: an assessment of the dismantling of the State. São Paulo: Editorial Generation, 2014; RIBEIRO Jr., Amaury. the toucan privacy. São Paulo: Editorial Generation, 2011; REIS, Arthur; LOEBENS, John. “The omission of tax nomenclatures: a brief study on “tax havens”. Tax Justice Institute, Porto Alegre, 28 Nov. 2019.

[6] About Brumadinho, see: FERREIRA, Dom Vicente. Brumadinho: 25 is every day. São Paulo: Popular Expression, 2020; GOULART, Julia. Memories of Brumadinho: lives that do not fade. São Paulo: Literary Autonomy, 2019.

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