Altamira, Brazil – Canadian mining company Belo Sun misled investors on July 27, presenting the dismissal of a lawsuit concerning its Volta Grande Gold Project as a “legal victory,” despite the court making no determination on the merits of the case. The ruling dismissed the claim solely because it duplicated an earlier lawsuit, leaving unresolved a raft of issues including Indigenous consultation, environmental assessments, tailings-dam safety, and other pending legal challenges facing the proposed Amazon mine.
In a statement issued to investors, Belo Sun described the outcome as a “major milestone” and a “clear validation” of its legal position. The announcement was released before the Toronto Stock Exchange opened and was followed by a 25% increase in the company’s share price. Belo Sun shares rose from C$0.92 to C$1.15 during that trading session, with approximately 1.18 million shares traded.
The dismissed lawsuit had directly challenged shortcomings in the project’s Indigenous Component Study and consultation process involving the Juruna (Yudjá) of the Paquiçamba Indigenous Land and the Arara of the Arara da Volta Grande do Xingu Indigenous Land, communities whose rights remain unaddressed. The court’s dismissal on procedural grounds did not resolve these outstanding issues. Before Brazil’s Federal Regional Court of the 1st Region (TRF1), conciliation proceedings continue, with Brazil’s National Foundation of Indigenous Peoples (FUNAI) actively determining which additional affected communities must be included in project studies and consultation processes.
“Closing a case because it is duplicative does not amount to judicial validation of a mine. While Belo Sun tells investors that its legal position has been confirmed, Indigenous consultation, tailings-dam safety and access to public land remain under dispute in other lawsuits and administrative processes. Investors need to know the full picture,” said Ana Alfinito, legal adviser at Amazon Watch.
The episode raises renewed questions about the accuracy of Belo Sun’s communications to international investors regarding the legal status and risks of the Volta Grande project. In 2021, a coalition of Brazilian and international organizations filed a complaint with the Ontario Securities Commission, asking the regulator to investigate whether the company had failed to meet its disclosure obligations by minimizing legal, environmental, and Indigenous-rights risks. The complaint contains allegations made by civil-society organizations and does not constitute a finding by the regulator. In 2022, Amazon Watch’s report The Risks of Investing in Belo Sun also identified misleading statements and lack of transparency as key risks associated with the project.
“Belo Sun has an established pattern of making questionable statements to investors about the standing of its mega-mine, both concerning its legal standing and level of standing with affected communities,” continued Alfinito. “Without any legal basis, its CEO claimed that ‘other repetitive lawsuits will certainly have the same fate’ as the one that was dismissed, undermining his and his company’s credibility.”
Pending litigation
In a separate lawsuit, Brazil’s Federal Public Defender’s Office is seeking the formal inclusion of the Mebêngôkre-Xikrin people of the Trincheira Bacajá Indigenous Land in the environmental licensing process and recognition of their right to Free, Prior and Informed consultation. The lawsuit also seeks the suspension of the project’s licenses and a court-supervised expert assessment of the tailings dam. Belo Sun claims this case is also repetitive, but that remains the company’s position alone and has not yet been confirmed by any final court ruling.
A critical hearing is scheduled for August 19, when TRF1 will consider appeals against a ruling that annulled an agreement granting Belo Sun access to 2,428 hectares of federal public land – including land within the Ressaca Agrarian Reform Settlement and the Ituna federal land area. The lower court found that land designated for agrarian reform could not have its public purpose changed without the legally required procedure.
