Financial Transparency Coalition

To contribute to bringing about transformative change in the industrial mining industry, this report demonstrates how state tax policies and corporate short-term profit maximisation are two key underlying drivers of the unsustainable exploitation of the Brazilian Amazon and its peoples by industrial bauxite mining. Specifically, this report contributes to a better understanding of the magnitude of the problems these factors create and who benefits from them. We analysed the aluminium value chain in Brazil’s Amazon, with a particular focus on the operations of the bauxite mining companyMineração Rio do Norte (MRN) as a case study

Tax exemptions to bauxite mining companies cut directly into the budgets of the state and municipalities tasked with providing public services and investing in sustainable development. This foregone tax revenue is felt disproportionately by Quilombola, indigenous and riverine communities, who have been custodians of the forests for centuries and who would benefit most from improved public services and environmental regulations. By so doing, these tax exemptions reinforce existing dynamics of intersectional social exclusion and serious regional inequalities in Brazil. At the same time, these tax exemptions directly increase the profits of bauxite mining companies, presumably incentivising their operations and thus perpetuating the unsustainable exploitation of Brazil’s Amazon by this sector.

This report also examines short-term profit maximisation by these companies as a structural driver of the unsustainable exploitation of Brazil’s Amazon. We demonstrate that large aluminium producers and mining companies, particularly multinational enterprises, have significant influence in, and benefit in various ways from, the operations of bauxite mining companies operating in Brazil’s Amazon. This report focuses on Norsk Hydro, Alcoa, Rio Tinto and South as those multinational enterprises that, in addition to having a shareholding in one or more of these mining companies, source or have sourced significant amounts of bauxite from them.

This report concludes by making recommendations to relevant actors in this field. Ultimately, Brazil’s tax policies and corporate short-term profit maximisation are two key structural factors that must be changed to protect the biodiversity of Brazil’s Amazon and the communities that have protected it for centuries.