Brazil's Vale forced to suspend nickel mine in Pará state

Brazilian mining giant Vale has halted production at its Onça Puma nickel mine in Pará state after notification from the state’s environmental and sustainability office (SEMAS) that its operating license had been suspended due to non-compliance with licensing conditions. 

“The company is in contact with SEMAS to understand the technical and legal grounds for the determination. It is also taking the appropriate administrative and judicial measures to reverse the order to suspend mine operations, which it considers unfounded,” Vale said in a press release.

Vale also said that it is “estimating the direct impacts of the shutdown of Onça Puma mine, to which will follow the probable losses incurred by those that are part of its value chain, such as suppliers, contractors, clients, and employees, in addition to the federal government, the state of Pará and the municipalities reached by the operations."

Onça Puma’s annual capacity is 58,000t/y of nickel contained in ferronickel.

The suspension of the mine does not come as a complete surprise since it has been a highly controversial operation. 

Earlier this year, NGO Finnwatch published a report about the mine with allegations that it generated deforestation, river pollution, and was threatening the lifestyle of the indigenous Fibrin tribe.

At the end of May, a supreme court judge ordered a one-year suspension of all socio-environmental legal proceedings related to Onça Puma to provide more time to find a consensus-based solution and avoid a long legal battle. 

Prosecutors had been demanding compensation since 2012 for environmental damage, including contamination of the Cateté river by heavy metals. Last year, the company reached a preliminary agreement with prosecutors and indigenous communities, involving a payment of 26mn reais (US$4.8mn) to the communities in the region in order to help clean up the river.

Separately, Pará state legislators are conducting a probe into Vale with a focus on the costs and benefits of the company’s operations for the state. Issues that are being investigated include tax incentives, transfers to municipalities, environmental compliance, and safety conditions at tailings dams.

The legislators will hold a hearing on November 15 with Vale’s CEO, Eduardo Bartolomeo, as part of the probe. 

Pará is an important mining hub for iron ore, manganese, copper, gold and nickel production. In this year’s first half, 44% of the country’s mining revenues were generated in the state, according to the most recently available figure from Brazilian mining association Ibram.