Vale's Apolo iron ore project faces legal trouble

Brazilian miner Vale's Apolo iron ore project in Minas Gerais state is grappling with a legal setback, highlighting risks and uncertainty related to licensing processes.

A local court ordered the annulment of the results of public hearings that took place in May as part the environmental licensing process. The Apolo project is planned to be located near the Serra do Gandarela national park in metropolitan Belo Horizonte.

But a local court spokesperson told BNamericas that a group called Manuelzão Project, linked to Universidade Federal de Minas Gerais, and NGO Guaicuy Institute, filed a measure to challenge the public hearing process, claiming it took place without authorization from the Chico Mendes Institute for Biodiversity Conservation (ICMBio), which is part of the environment ministry. 

Plans for Apolo involve a mine, a waste dump, a waste treatment plant and an 8km rail branch connecting to the Vitória a Minas rail (EFVM) to transport output to Tubarão port in Vitória, Espírito Santo state.

Planned output is 14Mt/y of sinter feed at natural humidity, without the need for water in the processing of iron ore. Due to the dry treatment, no tailings will be generated and the need for water is reduced by 95%. 

After the collapse of Vale tailings dams in Minas Gerais in 2015 and 2019, regulatory changes prohibited mining projects that involved tailings, forcing a review of all projects in planning phases.

Mining stakeholders agree that environmental licensing needs to be rigorous, not least to prevent another dam collapse, but the lack of clarity regarding deadlines has been a concern, including for the government.

"We really need to discuss details of environmental licensing in Brazil and I believe that this is an agenda to be addressed next year with priority. When I’m asked by investors abroad how long the environmental licensing process takes in Brazil, I don't know how to answer exactly and this needs to change. I'm not saying that licensing needs to be relaxed, but we need to have clear deadlines," Marcus Cavalcanti, the head of the federal investment partnerships program (PPI), told BNamericas. 

This situation impacts investors' perception of doing business.

"Investors face a series of difficulties in Brazil and I list as main difficulties taxes, labor legislation, environmental [licensing] issues, excessive regulation," Tito Martins, former Vale executive and ex-CEO of Nexa Resources, and now a mining consultant at Kaiau Consultoria, told BNamericas.

Litigation is another issue.

Recently, Brazil Potash, controller of Potássio do Brasil, announced a plan to hold an IPO on the New York stock exchange to finance its US$2.5 billion Autazes potash project in Amazonas state.

In June, the company announced that it received the construction license for a processing plant. Overall, Amazonas state licensing agency IPAAM has issued 12 licenses for the project so far.

However, the federal public prosecutor's office filed a lawsuit in May requesting the suspension of the construction license that was issued earlier this year for the sylvinite mine. 

According to prosecutors, the permits must be issued by federal environmental agency Ibama rather than IPAAM. In addition, prosecutors claim that the works will be carried out in areas populated by the Mura indigenous people, whose lands are in the process of demarcation.

ANM REGULATION 

Separately, mining regulator ANM is seeking stakeholder suggestions for the 2025-26 regulatory agenda. 

"The objective is to enable the regulated sector and society to assess the relevance of projects proposed in the 2022-2024 regulatory agenda that have not yet been finalized and to contribute to the proposition of new topics, if they are interested," ANM said in a statement. 

Comments may be submitted via the Participa + Brasil platform through October 2.

"The regulatory agenda is a planning, management and transparency instrument provided for in law No. 13,848, of June 25, 2019, through which priority projects are established for ANM's activities within the regulatory scope, promoting predictability and greater certainty for the regulated sector and society," the statement said.