December 23, 2012, 9:29 p.m. ET
Mining Giants Head to Amazon Rain Forest
In Next Five Years, About $24 Billion Will Be Invested to Boost Production in Remote, Environmentally Sensitive Region
By JOHN LYONS and PAUL KIERNAN
BELEM, BrazilóMining giants such as Brazil's Vale SA VALE -1.76% and U.K.-based Anglo AmericanAAL.LN -0.48% PLC are increasing efforts to extract minerals from Brazil's Amazon rain forest, a high-stakes foray into one of the world's most remote and environmentally sensitive regions.
All together, mining companies will spend some $24 billion between 2012 and 2016 to boost production of iron ore, bauxite and other metals found in the Amazon basin, according to Brazil's mining association, Ibram. Already, Brazil is attracting a fifth of all mining investment globally, and for many the Amazon represents the country's greatest untapped potential.
"The Amazon will be our California," said Fernando Coura, Ibram's president.
The push by miners into the Amazon fits with Brazil's broader strategy to tap the ain forest's natural resources to drive economic growth. Brazil is building hydroelectric dams on Amazon rivers, improving roads between far-flung Amazon towns and connecting them to the national power grid. Legal changes and government-backed lending will help pave the way for more Amazon mines.
Environmentalists are concerned the development surge may speed deforestation and overwhelm small communities in the region as the arrival of thousands of mine workers strains local infrastructure and services. world's largest remaining rain forest, roughly the size of Western Europe. Scientists say preserving the world's largest remaining rain forest and carbon sink is crucial to the global climate mix and for ensuring the survival of an estimated one-tenth of all global species.