Amazon caves may block Vale iron-ore mine – paper

RIO DE JANEIRO, (Reuters) – Vale, the world’s  second-largest mining company, may be unable to develop a  massive new iron-ore mine in the Amazon after archeologically  and environmentally sensitive caves were found at the site, the  Estado de S. Paulo newspaper reported yesterday.

The caves permeate much of the iron formations in the 3.4-  billion-tonne Serra Sul deposit, Estado said. Serra Sul is part  of Vale’s Grande Carajas mining project in Brazil’s Amazon  state of Para.

The newspaper cites surveys of the caves, cave explorers  and an article in Revista de Arqueologia (“Archeology  Magazine”) by Renato Kipnis, a researcher and partner in a  company hired by Vale to study Serra Sul’s caves.

Vale plans to invest $11.3 billion developing Serra Sul and  produce 90 million tonnes a year of high-grade ore from the  open-pit project over 40 years, Estado said. Vale produces  about 300 million tonnes of iron-ore a year or 12.5 percent of  the world’s total, according the the U.S. Geological Survey.

Exploration of some of the estimated 1,000 caves in the  region has revealed signs of human habitation over the past  10,000 years as well as unique geological formations and  cave-dwelling animal populations, Estado reported.

Recent archeology in the Amazon jungle of northern Brazil  has turned up evidence of much larger and older pre-Columbian  Indian populations than many scientists believed existed.

Vale said it was doing more environmental studies of the  caves but declined to comment further in an email to Reuters.

Demand for Brazilian iron-ore, much of which has iron  concentrations above 60 percent, has been growing as Chinese  demand for steel soars and viable deposits of high-grade ore  are depleted.

Vale is the largest producer of iron-ore and world’s  largest exporter of the product, the main ingredient in steel.

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