Vale buys stake in Amazon dam
A Brazilian indigenous chief attends a February protest in Brasilia against the construction of the Belo Monte hydroelectric dam.
The Brazilian mining giant Vale has announced plans to invest $1.5 billion in a massive and massively-controversial hydro-electric dam in the Amazon rain forest.
Business Week has the scoop today and they’re also connecting some dots for anyone left scratching their heads about why the world’s largest iron-ore producer suddenly wants a piece of the dam-building business.
We've hinted at this before, pointing out that this deal comes less than a month after Vale’s CEO was forced out amid criticism from the Brazilian government that the company wasn’t investing enough domestically. The Business Week piece quotes some observers here who say the deal doesn’t make much sense for Vale unless this government pressure is taken into account — especially considering all the negative press surrounding the dam project.
Set to be constructed on the remote Xingu river in the Brazilian Amazon, Belo Monte will be the world’s third-largest hydro-electric power station. The project has drawn sharp criticism both in Brazil and abroad. Environmentalists say it’ll harm the forest, indigenous people along the river groups say it’ll disrupt their way of life and, as we’ve reported, some technical experts say the dam may fail to deliver enough power to be worth building in the first place. For its part, the Brazilian government says the project is crucial to the country’s energy future.