UK court case launched over Brazil Iron mining project in Bahia

In a small community deep in the remote, lush mountains of Bahia, Brazil, Catarina Oliveira de Silva points down at what used to be a lake.

“After the mine started extracting there, waste came down. It fell into the spring. It buried this entire lake. Three metres of silt and ore sludge.”

Catarina says dust from this mine covered crops she owned, including coffee bushes and banana trees, until she could not produce them anymore.

She and her husband had also taken out a loan in 2015 for a business where people could pay to go angling in the lake.

“Our project went down the drain,” she says.

Catarina and her family live in a traditional Quilombola community, descendants of Afro-Brazilian slaves whose rights to their land and way of life are protected under Brazilian law.

Now, their fight against a UK-owned mining company is set to move to a top court in London.

Brazil Iron, a self-described “sustainable” mining company, is accused of damaging the environment, health, crops and water supplies of local communities near its Brazilian mine.

The company strongly refutes the claims. It says its project to produce greener steel could save millions of tonnes of carbon emissions annually and create thousands of local jobs if it is given a full licence to mine.

But locals like Catarina claim the mine has already caused extensive damage through its research alone. Other residents allege explosions from the mine cracked their houses, and dust pollution has affected their health.

There are 103 claimants now in the UK legal case, with claims spanning from 2011-2022.

They are seeking compensation for what their lawyers describe as “physical and mental health injuries and environmental losses” and are presenting their formal claim to a UK court today.

Edimone Almeida Silva claims her eldest daughter developed a respiratory problem that she did not have before the mine started operating, which improved after it stopped.

“She practically didn’t sleep the whole night trying to scratch her throat. I had to take her to the doctor who gave her an inhaler.”

The company says those making such claims have no evidence, and that it has offered independent medical examinations to members of the community.

Some residents ask why it had to mine here. The answer lies in geology.

Deep below the verdant Chapada Diamantina region of Bahia, lie iron ore reserves, kilometres wide, which is the key ingredient needed to make steel.

This makes the area a magnet for mining companies.

Steel is used in almost every aspect of our lives from buildings, trains and cars to fridges, furniture, and food packaging.

It is traditionally produced from reducing iron ore in dirty coal-fired blast furnaces that create huge amounts of carbon emissions.

Since Brazil Iron started operating in the region on a research licence in 2011, it said it had found a type of iron ore that can be turned into steel in electric arc furnaces – resulting in fewer carbon emissions -and can be extracted in Brazil using solar and wind power in Bahia.

The company paused operations in 2022 after a disagreement with Bahia’s state government over its permission to mine and is awaiting a new licence.

Brazil Iron says by continuing it could create 27,000 jobs in its construction phase, 10,000 jobs permanently directly and indirectly, and save 2.35 million tonnes of carbon from being emitted every year in the steel industry supply chain.

This tension between local jobs versus claims of local damage is playing out among the community, with some very supportive of the mine’s presence, its jobs, and the tax revenue it would raise for the nearby town.

Some of those who protested against the mine’s activities or joined the English lawsuit allege they were intimidated by mine employees and other residents, dissuading them from taking action and claiming it could harm them financially.

This led to a court injunction being issued against the company, ordering it to prevent staff from contacting the claimants except through lawyers.

Brazil Iron was found by the UK High Court to have broken this injunction when it wrote letters to some of the claimants after the order was made.

Erivelton Souza Silva is a member of the community who did get a job with the company.

“I didn’t have a source of income, most people always travelled to São Paulo,” he said.

He joined the company in 2019, and was taught how to operate heavy vehicles, machinery, and equipment.

“I think one of the main benefits that the company brought, as well as the opportunity to work with a formal contract, have paid vacations, was the opportunity to live close to family. That’s something money can’t buy.”

Brazil Iron denied its research had impacted the environment or community and said its “doors are always open” to mitigate any problems.

It said the allegations were “untrue” but could still have a “devastating impact on the economy of the area”.

It also argues it is “not appropriate” for the claims to be brought against the company in a UK court, and plans to challenge this and request it be heard in Brazil.

The lawyers representing the claimants disagree.

They argue that Bahia’s state agency for the environment and water also found the company had broken the terms of its environmental licences, for example through pollution and unmitigated detonations, in multiple reports and notices issued to the company between 2020-2022.

They also argue the case should be heard in the UK where the company is domiciled.

Brazil Iron, in the UK, exists for the sole purpose of funding its Brazilian subsidiary – which it says is the largest foreign investor in mineral research in Brazil.

Brazil Iron is funded by tens of millions of dollars’ worth of loans and shares from shareholders around the world.

It says it is “important for the globe” because it’s positioning itself as the world’s leading independent producer of green “hot-briquetted iron” using “100% renewable energy sources”.

The key question, which is an issue playing out around the world, is whether such resources contributing to a greener future are hurting the environment and way of life locally.

Rogério Mucugê, a local geographer at Bahia Catholic University, is not convinced the jobs and carbon-reducing benefits are worth it and argues communities with a “green” way of life shouldn’t have to change to provide the solutions for carbon emissions caused in more urban areas.

“The ideal when you arrive in a community is to listen to the community that knows the territory best,” he says.

“If we say this model is sustainable, that this model will generate clean energy, is it clean to kill a river? Do we need to sacrifice everyone in rural areas for the city?”