By Instituto Escolhas

29 January 2021

5 minute read

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What is the real socioeconomic impact of gold and diamond mining in the Amazon?”  

A new study released by the Instituto Escolhas explores the impact of gold and diamond mining on health, education and GDP per capita of municipalities in the Amazon region

Gold and diamond mining in the Amazon has become a major debate topic in recent years, and has intensified during the term of the current federal administration, alongside the issues of increased deforestation and armed conflict over land use. This week, while reinforcing his commitment to the conservation of the Amazon during the World Economic Forum, Vice-President Hamilton Mourão met with wildcat mining representatives who wish to authorize their currently illegal operations in the Amazon, including mineral exploration in protected areas.

The question remains: does mineral exploration actually bring about socioeconomic advances? And how long do such advances really last? These and other questions were addressed during an Instituto Escolhas Webinar on 28 January, which presented the results of the study “What is the real socioeconomic impact of gold and diamond mining in the Amazon?”.

The study, undertaken by an interdisciplinary team of regional development experts led by Carlos Manso, a researcher at the Poverty Studies Laboratory of the Federal University of Ceará (LEP/CAEN), addresses how mineral extraction in the municipalities of the Legal Amazon impacts upon key issues for local populations, such as health, education, and GDP per capita. The research project aims to determine whether mining is really able to transform these municipalities’ realities, inviting debate on which activities should be encouraged in which region.

Get to know the results

Projects and Products Manager at the Instituto Escolhas, Larissa Rodrigues, comments that the study reveals new data about mining practices from an economic perspective. The study is launched at a time when gold prospecting has increased dramatically in the Amazon, encroaching on sensitive areas such as Indigenous Lands and Conservation Units, since investors continue to show an appetite for financial assets including gold.

“What the study has shown is that gold and diamond exploration does not incur lasting benefits, since the activity is unable to improve important municipal indicators. Last year, we surpassed the 100-ton mark for gold extraction, moving almost US$ 5 billion. Who owns this wealth? The resources are taken away and there is no development. What is left is a trail of environmental destruction and a sick, uneducated population,” stated Rodrigues.

According to Rodrigues, the study shows the actual – significantly low – socioeconomic impact of mineral extraction for Amazonian municipalities, questioning why there is a continued insistence on promoting mining activities.

“Nobody wants a poor, uneducated and sick population. So why so much pressure to open up indigenous lands and conservation units? These results show that, instead of investing in an activity that is failing to bring development to the people, we should invest in new development alternatives,” commented Rodrigues.

About the event 

During the webinar launch, Carlos Manso from the LEP/CAEN presented the research results, comparing data from Amazonian municipalities where gold and diamond had been extracted to municipalities where it had not, which made it possible to measure the isolated impact of gold and diamond mining. The results proved that the positive impacts of mining are only ever temporary. 

“The study evaluated the impacts of gold and diamond mining in municipalities of the Legal Amazon and showed that the only persistent effect was on employment and income, while for other indicators such as GDP per capita, education and health, there are only temporary effects that dissipate quickly,” commented Manso, adding that the study proved that mining was a direct cause of deforestation during the period in which municipalities were exposed.

Representatives from different sectors of society participated in the debate, including Marco Aurélio Costa, representative of the INCT – National Institute of Science and Technology in Public Policies and Territorial Development (INPuT); Rinaldo Mancin, Director of Institutional Relations at the Brazilian Mining Institute (IBRAM); and Sônia Guajajara, Executive Coordinator of the Articulation of Indigenous Peoples of Brazil (APIB).

First to speak, Sônia Guajajara participated on behalf of people affected by mining, highlighting the health issue and the numerous governmental and legislative attempts to expand the mining areas. “In the middle of the pandemic, the Ministry of Mines and Energy released a decree stating that mining is an essential activity. The question is: essential for whom?”, questioned APIB’s Executive Coordinator, adding that it is necessary to devise other ways of generating income: “To think about development is to think about the collective, with good education, public health, leisure opportunities, clean water,” added Guajajara.

Next, representing the mining companies, Rinaldo Mancin, Director of Institutional Relations at the Brazilian Mining Institute, stressed the importance of differentiating between corporate mining, which he argued has stricter regulations and contributes to environmental conservation, and wildcat prospecting and other illegal mining practices. 

Mancin reinforced the importance of the mining sector and stated that “disasters [such as the tailings dam ruptures in Mariana and Brumadinho] are the exception, not the rule.

Last to speak, Marco Aurélio Costa, a researcher at the IPEA – Brazilian Institute for Applied Economic Research and National Coordinator of the INCT / INPuT, addressed the concept of mining-dependent cities. According to Costa, “one of the features of the mineral-dependent relationship is a visible production of wealth that is not necessarily retained, while any wealth that is retained is not distributed and does not contribute to the transformation of the territory”, explained Costa, who brought his personal experience by citing the case of Vale do Jequitinhonha, “a region that has a history of mineral exploration, but which has not developed”.

The complete report and executive summary of the paper “What is the real socioeconomic impact of gold and diamond exploration in the Amazon?” are available on the Instituto Escolhas website. Click here to access these and other materials: escolhas.org/en/biblioteca/estudos-instituto-escolhas/

Learn more about the “Where does gold come from?” campaign, which addresses the need for stricter control of gold purchases in order to reduce illegal exploitation and trade. Learn more at: https://escolhas.org/en/amazoniasemgarimpo/

You can also access the Discussion Paper: “The new gold rush in the Amazon: where prospectors, financial institutions and flawed monitoring come together an stay and advance over the forest”

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