Brazil suspends licensing of Chinese iron ore project

The Brazilian Federal Court of Montes Claros in the state of Minas Gerais has made a preliminary decision to suspend licensing procedures for the Sul Americana de Metais (SAM) iron ore project. SAM is a subsidiary of Honbridge Holdings in China.

Projeto Bloco 8 includes an iron mine located in Gran Mogul and Padre Carvalho, with a sewage treatment plant, a water dam and other facilities. The project also includes a 480 km pipeline that is to transport material to the port at Ilheus, crossing 21 municipalities. SAM plans to produce 30 million tonnes of 20% iron ore annually.

The State Attorney's Office of the State of Minas Gerais in Brazil and the Federal Ministry of State have questioned the separation of licensing procedures. This applies to the state of Minas Gerais, for the mine, and the Institute for the Environment and Renewable Resources (Ibama), in the case of an associated pipeline. Ibama had already concluded that the project was not viable due to its scale and social and environmental damage.

Due to low-grade iron extraction, millions of tons of non-commercial material will be removed and placed in three reservoirs with a total capacity of 2.4 billion cubic meters.