Vale Becomes Brazil’s Largest Investor in Africa and is Subject to Criticism

Portuguese Translation of the Week

It is under intense sunlight, which easily elevates the temperature to up to 40 degrees Celsius, that the largest Brazilian investment in Africa, Vale's carbon operation in Moatize, Mozambique, is taking place. This is the third year of Vale's production in the country and there is much criticism about the living conditions of the more than a thousand resettled families and the tax exemptions obtained by the mining company. In addition, a new armed conflict that has started in the country may undermine the company's operations.

É em meio a baobás e debaixo de um Sol incisivo, que eleva a temperatura a 40°C com facilidade, que se movimenta o maior investimento do Brasil na África hoje: a operação de carvão da Vale, em Moatize, Moçambique. Este é o terceiro ano de produção da Vale no país e há críticas tanto sobre as condições de vida das mais de mil famílias reassentadas quanto com relação às isenções de imposto obtidas pela mineradora. Além disso, um novo conflito armado iniciado no país pode prejudicar as operações.

This article has been translated from Portuguese. Click here to read the original version on Estadao.

The carbon reserves in Moatize are considered to be the largest unexplored reserves in the world. In 2004, part of them was granted to Vale after 24 years of negotiations between the governments of Brazil and Mozambique. In 2012, the mining company became the largest investor in the country – surpassing Portugal, South Africa and China. The first phase of investments totaled US$1.8 billion. The second phase has already started and should amount to US$6.4 billion. The total value represents more than half of Mozambique's annual GDP.

Aside from the new mine, which is being managed by Odebrecht, Vale is also constructing a 912 kilometer railroad, equivalent to the length of the Carajás Railroad in Pará, Brazil. It will link Moatize to the port city of Nacala, where Vale is also building a deep-water port. The Brazilian construction company OAS is participating in the consortium that will conduct the construction.

It is expected that Vale will produce 6.2 million tons of coal this year. When the operation is at full capacity, in 2017, the production is expected to reach 22 million tons. The coal is mined in open air, with high technology and strict safety parameters.  "Vale is a Brazilian company, which arrives with a Brazilian "accent", but with the desire to be a Mozambican company", said Ricardo Saad, Vale's project director for Africa, Asia and Australia.

Resettlements

In the area where Vale is currently located there were three different population groups amounting to 1,313 families. They were removed to two settlements constructed by the mining company. One of them is in Moatize, the neighboring city, where the populations with urban characteristics were taken. The other was for those who lived on subsistence farming, built in what can at best be describes as "the middle of nowhere."

The village, named Cateme, is located 37 kilometers from what the resettled call the "area of origin", best defined as the region from where they came. There is no nearby town, and the closest paved road is at an eight kilometer distance. Hence, the communities lost access to the markets where they sold the products they harvested or collected from nature. In addition, the geography is different, starting with the absence of baobá trees which are plentiful in the area where Vale is now. The soil is dry and rocky. According to the resettled, it is less suitable for agriculture.

Vale says that the location of Cateme was decided upon by the government of Mozambique. The map of exploration permits in the region shows that the resettlement is on a skim piece of available land in the midst of a checkboard of areas that have already been distributed.

There are two main criticisms about the resettlement: the low quality of the houses that were built and the lack of access to livelihood and work. The homes are being redone for the second time. The biggest problem lays in the foundations that underpin the construction, which are thin and do not resist erosion. In some cases, the extremities of the foundations loosened and detached from the dirt floor, giving off the impression that the houses were floating. There are many who are opposed to minor repairs and are advocating that Vale rebuild them from scratch.

Article translated by Anna Cardenas, Staff Intern for the Brazil Institute at the Wilson Center.

Photo attributed to Wikimedia Commons.