Brazil’s Supreme Federal Court has temporarily suspended the installation licence for Belo Sun Mining’s (TSX: BSX; OTCQX: BSXGF) $300 million Volta Grande gold project in Pará state, delaying plans to develop what could become the country’s largest open-pit gold mine.
The court partially granted a request from Brazil’s Federal Public Prosecutor’s Office (MPF), suspending an earlier ruling that had reinstated the project’s installation licence. The suspension will remain in effect until a settlement agreement between Belo Sun and Brazil’s National Foundation of Indigenous Peoples (Funai) receives judicial approval.
Belo Sun said Wednesday that the agreement has already been submitted to Brazil’s Federal Regional Court of the 1st Region (TRF-1), although approval remains pending.
“The STF’s recognition of the relevance of the settlement hearing established by the TRF-1 is welcomed,” Belo Sun CEO Clovis Torres said in the statement. “We are advanced in our discussions with FUNAI with the settlement agreement submitted to TRF-1 and are confident that the parties will reach an agreement in the best interests of all stakeholders.”
The ruling prolongs uncertainty for the Canadian miner, whose flagship project has faced years of legal challenges over environmental licensing and Indigenous rights. However, the court’s decision leaves open a potential path toward reinstating the licence through judicial approval of the negotiated agreement.
Indigenous concerns
The dispute stems from a civil lawsuit filed by federal prosecutors against Belo Sun and the Pará state government, seeking to annul the project’s preliminary environmental licence.
Prosecutors also sought to halt environmental licensing until the company completed an Indigenous Component Study meeting Funai’s requirements. A federal court initially upheld those demands in June 2014.
Supreme Court Justice Edson Fachin cited uncertainty over whether the project’s potential impacts on nearby Indigenous communities had been adequately assessed.
“The continuation of the implementation, at this moment, would pose a risk of serious harm to public order and the environment, since the project, due to its exceptional scale, may produce significant impacts in the affected region,” Fachin said in the court decision.
Fachin also highlighted the cumulative environmental pressures on the region from the nearby Belo Monte hydroelectric dam, saying existing impacts warrant greater caution when evaluating additional development.
Belo Sun said the parties are already fulfilling their respective obligations under the settlement agreement despite the pending court approval. The company has committed to refraining from any physical interventions at the project site while negotiations continue.
The miner said it remains engaged in discussions with Funai and affected Indigenous communities as part of the conciliation process.
Legal uncertainty
Volta Grande has faced repeated setbacks in Brazil’s courts. In July 2022, a Pará state court overturned a separate suspension of the project’s licences, after a lower court raised concerns about consultations with riverside communities.
Opposition has also attracted international attention. In September, Hollywood actor and environmental activist Leonardo DiCaprio called for the project’s permitting process to be suspended, adding his voice to concerns about its potential environmental and social impacts.
Belo Sun has also made leadership changes amid the prolonged legal dispute. In June, the company appointed Torres, then its board chairman, as interim CEO following Adriano Espeschit’s departure from its Brazilian operations.
Torres, a lawyer and co-founder of Mello Torres, previously held senior legal positions at Brazilian mining giant Vale and has experience handling mining-sector litigation.
Volta Grande hosts proven and probable reserves of about 3.8 million oz. of gold and has a projected a projected average annual production of approximately 205,000 to 205,155 oz. of gold over a 17-year mine.