Amazon projects in jeopardy as Brazilian prosecutors challenge mining permits, O&G auction results

Brazil’s attorney general’s office is intensifying its scrutiny of mining and oil and gas projects in the Amazon rainforest, heightening the environmental and legal risks for companies’ activities in the region.

The office recommended the suspension of mining processes in Amazonas state, an area that is particularly sensitive due to environmental concerns and the potential impacts on indigenous peoples.

In an internal document issued during a civil inquiry into irregularities in regional mining procedures, attorney André Luiz Porreca Ferreira Cunha advised mining regulator ANM to reject, annul or suspend several mining requests involving protected areas in Amazonas, including indigenous territories and environmental conservation units.

According to the official, authorities have identified a practice in which large areas designated for mining are artificially subdivided into smaller lots to avoid stricter regulatory scrutiny.

“The regulation that allows the granting of exploration areas of up to 50 or 1,000 hectares cannot be interpreted as authorization to artificially divide the territory into smaller, adjacent concessions, thereby creating a ‘super exploration polygon’,” he wrote in the recommendation.

The internal document, including the full recommendation from the attorney, can be seen here, in Portuguese.

Amazonas state, in northern Brazil, contains a large portion of the Amazon rainforest and is home to numerous indigenous peoples.

“The region is highly sensitive both due to environmental issues and the potential impacts of mining activities on local communities, including indigenous peoples. What further increases the risks for mining operations in the area is the fact that the current legislation does not clearly outline all the steps required for public consultation with local communities,” Gizelle Tocchetto, director of sustainability and institutional relations at iron ore company Morro do Pilar Minerais, told BNamericas.

“This lack of clarity places mining projects in the region under significant legal risk.”

Oil & gas

Oil and gas exploration in the region is also facing scrutiny from authorities.

The attorney general’s office has asked the federal court to suspend the next stages of the oil and gas block auction under the 5th permanent concession offer, which was held last week by regulator ANP.

“The request seeks an immediate prohibition of any administrative actions to formalize the results until a series of measures outlined in socio-environmental legislation are fulfilled,” the attorney general’s office said in a statement.

Last week, Brazil’s 5th open acreage concession round attracted 1.5bn reais (US$270mn) in exploration investment commitments and generated 989mn reais in signing bonuses for the government.

The auction saw intense competition among major oil companies for blocks in the Foz do Amazonas basin, located in the Equatorial Margin.

This prolific but environmentally sensitive region holds estimated reserves of 10bn barrels of oil.

The mouth of the Amazon river lies between Pará and Amapá states, which also contain significant portions of the Amazon rainforest.

The government, along with companies in the oil sector, has been working to advance environmental licensing for large-scale exploration and production in the region. However, these efforts have encountered strong resistance from prosecutors and pro-environmental groups.