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For Gerdau to Advance in Mining Investments in Two Municipalities in Minas Gerais, It Will Be Necessary to Convince Local Communities and NGOs
A iron ore mining project of 1.5 billion reais (US $ 283 million) from the Brazilian steelmaker Gerdau is at risk due to an environmental controversy. The company planned to invest the amount by the end of next year, expanding the mining complex of Várzea do Lopes in the municipalities of Itabirito and Moeda.
Gerdau was awaiting approval from state legislators, as the area is in an environmental preservation zone and mining requires a change in legislation.
The state representative Antonio Carlos Arantes, who supported the project, stating that the area to be removed from the park would be 12.8 hectares or only 0.54% of the total protected zone, is no longer supporting the plan.
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The legislator demands that the company discuss the matter with local communities and NGOs to find an amicable solution before the project is debated by state legislators.
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The controversy arises as investors and banks increase pressure on companies to adopt more ESG friendly practices worldwide. The trend is to force companies to intensify dialogue with NGOs and society in general.
“Dialogue between companies and their value chains is increasingly present in ESG strategies and best practices, and technology and innovation are likely to further enhance this engagement” , Tatiana Assali , manager of institutional relations at the Brazilian Business Council for Sustainable Development (CEBDS), told BNamericas.
Meanwhile, Gerdau Believes It Will Solve the Problem and Move Forward with the Project.
“Gerdau continues to believe in the importance of the project, which represents the possibility of investments of R $ 1.5 billion in the state, maintaining 5,000 direct and indirect jobs… We are open to dialogue and are at the disposal of the mining community to build the best solution together“, the company said in a statement.
The project aims to keep the Várzea do Lopes mine operating at the same pace for another 10 years, as it is reaching the end of its useful life. The company declined to provide production data.
All the iron ore from the mine is used in Gerdau’s steel operations. The company, headquartered in Porto Alegre, is the largest steelmaker in Latin America.
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