Brazil court overturns suspension of Canadian potash mine in Amazon

By Anthony Boadle

BRASILIA (Reuters) -A federal appeals court has overturned an injunction suspending the license for Canadian firm Brazil Potash Corp to build Latin America's largest fertilizer mine in the Amazon rainforest.

The Federal Regional Tribunal 1 ruled on Tuesday that the Amazon state environmental agency IPAAM has the authority to issue the license because there is no officially recognized Indigenous territory in the area of the planned $2.5 billion mine.

Federal judge Jaiza Fraxe in Manaus last month reiterated her 2016 decision to suspend the project until the Mura, a local Indigenous people, were consulted. She also ruled that a license must come from federal environmental agency IBAMA and not state agency IPAAM.

The appeals court ruled that there is no evidence that the area where the mine is planned is located on Indigenous lands, according to the decision seen by Reuters.

"If the area of ​​the mineral deposit in question was covered by demarcated Indigenous land, there would be no doubt about federal competence for licensing; or even if it was Indigenous land in demarcation process. But that is not the case," it said.

Brazil Potash on Wednesday declined to comment on the ruling, which was based on an appeal by the state environmental agency IPAAM.

The Mura, who number about 15,000 people, are divided on whether to agree to the mine.

A delegation of those who support the project met on Wednesday in Brasilia with Mines and Energy Minister Alexandre Silveira, who said the mine was "strategic" for the country.

"Brazil is the world's breadbasket and we cannot be without potash," Silveira said in the meeting, according to a ministry statement that said the mine could supply 20% of Brazil's needs for 23 years.

The proposed mine in Autazes, 75 miles (120 km) southeast of the Amazonas state capital Manaus, would reduce Brazil's current reliance on imports for 95% of its potash fertilizer use. The mine is slated to produce up to 2.4 million tonnes a year.

Representatives for a local Mura community in nearby Soares say the mine overlaps their ancestral lands and have claimed it should be recognized as protected reservation land. But the demarcation process has just begun with studies by Indigenous affairs agency Funai, so it is not yet an official claim.

The head of Funai, Joenia Wapichana, told Reuters she had set up a working group that includes anthropologists to study the land claim, but their studies would need time.

Sergio Mura, the chief of the Soares community, the vulnerable to the mine project, said his people were not consulted. "They did not invite us," he said in an interview.

Brazil Potash is owned by CD Capital with a 34% stake, Sentient with 23% of shares, and Stan Bharti's Forbes & Manhattan Group, a Toronto-based merchant bank that began the project, which now holds 14%, along with other shareholders.

Brazil Potash last month touted the support of Mura leaders, local politicians and Governor Wilson Lima, who has backed the mine to bring investment and jobs to Amazonas state.

Federal prosecutors in Manaus said support for the mine was not unanimous and provided a letter from a Mura village saying community leaders had been misled into signing meeting minutes that the company construed as approval for the mine.

Some of the Mura have expressed concerns that the mine could pollute rivers and scare away the game and fish they rely on. Brazil Potash says it would have minor environmental impact because salt separated from the potash at a processing plant would be returned underground.

(Reporting by Anthony BoadleEditing by Marguerita Choy, Bill Berkrot and Diane Craft)