A handful of global giants dominate the industrialisation of the Amazon rainforest, extracting tens of billions of dollars of raw materials every year, according to an analysis that highlights how much value is being sucked out of the region with relatively little going back in.
But even as the pace of deforestation hits record highs while standards of living in the Amazon are among the lowest in Brazil, the true scale of extraction remains unknown, with basic details about cattle ranching, logging and mining hard to establish despite efforts to ban commodities linked to its destruction.
From the world’s largest iron ore mine to a ranching industry that slaughters more than 6 million animals a year, the Guardian analysis – carried out as part of a joint project with Forbidden Stories to mark the anniversary of the killings of Bruno Pereira and Dom Phillips – shows how the world’s most biodiverse land is now also a home to industrial powerhouses. The firms are sources of economic growth and employment for the communities and for the country. But they are operating in an environment – the world’s largest rainforest and a critical carbon sink – that presents unusual challenges.
A deforested and burnt area of the Amazon rainforest near Humaitá in September 2022. Photograph: Michael Dantas/AFP/Getty Images
These companies’ commitments to Amazon restoration vary enormously. If their operations can be consolidated and made more transparent and accountable, they have the financial power to be part of the solution for the rainforest, rather than the problem – as some have been until now. This is essential because the degradation of the Amazon is approaching a tipping point, after which the forest will start to dry up and lose its globally important function as a climate regulator.
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How we calculated the value of Amazon extraction
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How we calculated the value of Amazon extraction
There is no comprehensive data on the economic value of extraction in the Amazon. The Guardian has sought the best-quality data to make estimates for all major sectors. All figures have been adjusted for inflation and presented in 2022 US dollars. The reported value of extraction was not necessarily realised by the company that extracted it.
For the mining sector, we used company reports and market data provided by Refinitiv to estimate the value of production from major projects in the Amazon. For beef, we combined data on slaughterhouse capacity from Imazon research with information on the average idleness rate and its market value, according to Scot Consultoria, to estimate the value of production in Brazil.
For soya beans, we combined historical market data with research by Trase on soya exports to estimate its value. For pulp, we estimated the value of production using port export disclosures and average annual price data. Palm oil figures were based on the material published by the relevant companies.
Using company records, financial data and scientific studies, the Guardian has tried to establish the value of goods that are commonly extracted from the Brazilian Amazon, including through gold, iron ore and bauxite mining, cattle ranching, soy farming, pulp production and the logging industry.
Mining and meat
In terms of revenue, one company stands head and shoulders above the others: since 2010, the Brazilian mining company Vale has extracted more than 4bn tonnes of iron ore from Carajás mine, in the state of Pará, worth $220bn (£176bn), according to the analysis.
Pará is also home to Alunorte, the biggest aluminium refinery outside China, generating about $15.3bn in revenue since 2014 for the Norwegian mining firm Norsk Hydro, which is part-owned by the Norwegian government.
The Norsk Hydro Alunorte refinery in Barcarena, Pará state. Photograph: Jonne Roriz/Bloomberg/Getty Images
Alcoa and MRN lag behind these vast numbers, but they too are realising large revenues. Alcoa, a Pittsburgh company that has only recently moved into the Amazon, does not release figures that are easily interpretable. MRN, a subsidiary of Vale, has produced bauxite ore worth $8.3bn since 2013 from its operation in Pará.
The mining sector, by far the most financially lucrative Amazon activity, includes many small firms, with more than $4.2bn of gold extracted between 2018 and 2022 by artisan producers, according to analysis of figures provided by Refinitiv, part of the London Stock Exchange Group. But the lion’s share goes to the big companies at the top.
Maurício Angelo, the founder of the Mining Observatory, notes that the area occupied by legal industrial mining in Brazil has grown sevenfold since 1985. He says this expansion brings huge environmental liabilities, including infrastructure (roads, hydroelectric plants, ports, railroads.) as well as the removal of traditional peoples, and the threat of disaster.
Overall, he says, the industry has never lived up to its claims of sustainability. “Mining did not deliver the development it promised and confined cities and entire regions to underdevelopment, with very low quality of life, few and precarious jobs, with huge environmental liabilities and almost no practical return for society.”
Vale says it is aware that as a company it has a responsibility to “contribute to socioeconomic development and establish relationships of respect and trust in the territories where it is present”. It says it has invested more than 1bn Brazilian reais (about $200m) over the last decade in protection, research, territorial development and cultural incentive actions in the Amazon.
Cattle in a holding pen on a farm in São Félix do Xingu, Pará state. Photograph: Bloomberg/Getty Images
The beef industry is far smaller than the mining sector in terms of economic value, though not in impact and footprint. Data is hard to find, but according to the Guardian’s analysis, cattle slaughtered in the Amazon by JBS were worth about $5bn in 2016 while they were still in Brazil, while JBS’s closest competitors, Minerva and Marfrig, processed about $600m and $1bn’s worth respectively. The value fell dramatically in 2022, largely because of exchange rate fluctuations, to $3.9bn for JBS, $547m for Minerva and $709m for Marfrig. But this is just the value of the beef coming out of the slaughterhouse; far more value will be added further along the complex supply chain, and by an overwhelming margin the economic value of this industry is being realised outside Brazil, on dinner plates at restaurants in Beijing and New York.
Paulo Barreto, senior researcher with the Brazilian research institute Imazon told the Guardian: “Although major beef supply companies, including meatpackers, supermarkets and financial institutions, have pledged to decouple from deforestation, the sector has not done all that it should.” He argued that the combination of irresponsible behaviour by some private companies with “the dismantling of public conservation and indigenous policies in the past four years led to a twofold increase in deforestation rates in the region compared to the previous ten years average.”
Ranching is the biggest driver of deforestation and greenhouse gas emissions after land grabbing, with which it is often closely associated. By 2018, the Brazilian Amazon had lost 741,759 sq km (about 286,000 sq miles) of its original forest cover, mainly due to agricultural expansion. This accelerated during the presidency of Jair Bolsonaro, when forest clearance increased by 59.5%, the fastest rate since at least 1988. More than 2bn trees were cut or burned.
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What is the Bruno and Dom project?
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What is the Bruno and Dom project?
Bruno Pereira, a Brazilian Indigenous expert and Dom Phillips, a British journalist and longtime Guardian contributor, were killed on the Amazon’s Itaquaí River last June while returning from a reporting trip to the remote Javari Valley region.
The attack prompted international outcry, and cast a spotlight on the growing threat to the Amazon posed by extractive industries, both legal and illegal, such as logging, poaching, mining and cattle ranching.
A year after their deaths, the Guardian has joined 15 other international news organisations in a collaborative investigation into organised crime and resource extraction in the Brazilian Amazon. The initiative has been coordinated by Forbidden Stories, the Paris-based non-profit whose mission is to continue the work of reporters who are threatened, censored or killed.
The goal of the project is to honour and pursue the work of Bruno and Dom, to foreground the importance of the Amazon and its people, and to suggest possible ways to save the Amazon.
Who was Bruno Pereira?
Pereira, 41, was a former employee of the Indigenous agency Funai where he led efforts to protect the isolated and uncontacted tribes who live in the Brazilian Amazon. After being sidelined from his post soon after the far-right president Jair Bolsonaro came to power, Pereira went to work with the Javari Valley Indigenous association Univaja, helping create Indigenous patrol teams to stop illegal poachers, miners and loggers invading their protected lands.
Who was Dom Phillips?
Phillips, 57, was a longtime contributor to the Guardian who had lived in Brazil for 15 years. A former editor of the dance magazine Mixmag, he developed a deep interest in environmental issues, covering the link between logging, mining, the beef industry and the destruction of the Amazon rainforest. His reporting brought him into contact with Pereira, and in 2018 the pair took part in a 17-day expedition deep into the Javari Valley. In 2021 he took a year off to start writing a book, titled How to Save the Amazon. His return to the Javari was to have been the last reporting trip for the project.
What is the Javari Valley?
Sitting on Brazil’s border with Peru and Colombia, the Javari Valley Indigenous Reservation is a Portugal-sized swathe of rainforest and rivers which is home to about 6,000 Indigenous people from the Kanamari, Kulina, Korubo, Marubo, Matis, Mayoruna and Tsohom-dyapa groups, as well as 16 isolated groups.
It is also a hotspot for poachers, fishers and illegal loggers, prompting violent conflicts between the Indigenous inhabitants and the riverside communities which fiercely opposed the reservation’s creation in 2001. Its strategic location makes it a key route for smuggling cocaine between Peru, Colombia and Brazil.
What happened to Pereira and Philips?
On 2 June 2022, Pereira and Phillips travelled up the Itaquaí River from the town of Atalaia do Norte to report on efforts to stop illegal fishing. Two days later, members of the Indigenous patrol team with whom Pereira and Phillips were travelling were threatened by an illegal fisher. Early on 5 June, the pair set out on the return leg before dawn, hoping to safely pass a river community that was home to several known poachers.
They never arrived, and after a search by teams of local Indigenous activists, their remains were discovered on 15 June.
Three fishers are being held in high-security prisons awaiting trial for the killings: brothers Amarildo and Oseney da Costa de Oliveira and a third man, Jefferson da Silva Lima.
Federal police have alleged that a fourth man, nicknamed Colombia, was the mastermind of the killings.
JBS, the world’s biggest meat company, has been urged to use its commercial strength to improve environmental and social governance in the Amazon. The last story by Phillips published in the Guardian was a report about a 65% increase in JBS profits in the last quarter of 2020. The story quoted Mauro Armelin, of Friends of the Earth, observing that the results meant the firm had “plenty of money to spend in removing illegal deforestation from its Amazon supply chain”. JBS has promised to do this by 2025, but it has made no commitment to restitution for the damage its operations have already caused. JBS disagreed with the Guardian’s analysis but declined to comment.
Soya and pulp
The soya sector is another powerhouse in the region. Between 2014 and 2020, five multinational food companies – Bunge, Cargill, ADM, Amaggi and Louis Dreyfus – extracted soya worth $18bn on global markets, according to the analysis. The major players have all signed a moratorium to halt deforestation.
Palm oil and pulp production are also growing industries in the Brazilian Amazon. The Brazilian paper maker Suzano produced about $5bn of eucalyptus pulp between 2018 and 2022, according to the analysis. Brasil Biofuels is established entirely in the Amazon, and had revenues in 2022 of about $305m. Agropalma, another biofuel giant, operates mainly in the Amazonian state of Pará and had revenues of about $284m in 2021 and $468m in 2022, with plans to increase production by 50% by 2025.
A eucalyptus plantation and rainforest about 50 miles north of Porto de Moz, Pará state. Photograph: Daniel Beltrá/Greenpeace
The companies involved in these activities all claim they are part of the Amazon solution because they only plant on land that was degraded more than 10 years ago. “We have a regenerative business model,” says Suzano, adding that it plants more than 1.2m trees a day and only harvests what it plants.
There is plenty that it is not possible to quantify or measure. The analysis does not include the corporations providing services – the giant seed tech companies, or the construction companies building roads and houses, the hydropower companies and heavy machinery producers. Without measurable assets, it is impossible to estimate the value being produced for those companies within the legal Amazon territory. The timber and fishing industries have remained far more diversified, as have most of the crops (bananas, acai, cacao) besides the ones mentioned above.
And the analysis does not include the most valuable asset of all: land, and the role that the cattle industry has played in converting forest into pasture. The Science Panel for the Amazon concluded that 15.1m hectares (37.3m acres) of public land was taken into private hands between 1995 and 2017, and noted a trend in which “cattle enterprises bought or appropriated forested land at a relatively low market price and, after ‘producing’ land without forest, transferred it at the much higher price of land covered by pasture”.
These operations may have yielded $400m a year in profit for that period alone, states the report, arguing that cattle is the perfect way to transform forest into private property.
One of the problems, observers say, is that an extractivist development model has prevailed in the Brazilian Amazon ever since it was opened up by the country’s military dictatorship in the 1970s. The World Bank has belatedly recognised the folly of this approach, with a recent report finding that the losses caused by clearing the Amazon, at $317bn a year, were seven times higher than the gains from commodity extraction.
A satellite view of wildfires in the Amazon in August 2019. Photograph: Nasa
But the trend has been towards ever greater depletion of the forest to satisfy global markets and shareholders, encouraged by the Brazilian government which has helped things along with easily available finance, tax exemptions and hefty subsidies.
Meanwhile, it is still often impossible to establish the provenance of beef, gold or other commodities from the rainforest, and global market regulators and trade institutions have been criticised for continuing to permit opaque supply chains.
This logic, which has prevailed since the first European colonisers invaded South America more than 500 years ago, is now under intense scrutiny because the Amazon is so degraded that scientists warn this pillar of the global climate is close to collapse. At the very least, companies operating in this region need to be more accountable, more transparent, more efficient and more willing to pass on environmental costs to their customers and shareholders rather than nature.
Members of the Kayapo Indigenous group walk along a highway on the outskirts of Novo Progresso in August 2020 during a protest against a lack of government support during the Covid pandemic and illegal deforestation in and around their territories. Photograph: Lucas Landau/Reuters
‘Giving something back’
In response to the Guardian’s analysis, several of the companies said they contributed to the local economy, followed national laws and tried to minimise their environmental impact. Their responses give an idea of the varying levels of commitment to “giving something back”.
Brazil Biofuels argued it should not be considered an extractive company because it only planted palm oil plantations on land degraded before 2007. “The business model recovers the Amazon biome, contributes to the balance of the forest, stocks carbon, [and] works to recompose the soil cover and the biogeochemical and hydrological cycles. In addition, by generating employment and income for needy communities, it encourages forest preservation and reduces the impact of deforestation,” it said.
Similarly, the eucalyptus firm Suzano said it was a “vocal critic of the lack of action to combat deforestation in Brazil” and had a regenerative business model. “Over 40% of our land is set aside for permanent conservation (nearly 1m hectares), including significant areas in the Amazon, Cerrado and Atlantic Forest biomes,” the company said in an email. It claimed its social programmes had helped 30,000 people out of poverty and generated R$79m of income for local people.
The mining firm Vale stressed the role it plays in the local and Brazilian economy, saying the Carajas complex and other operations in the Amazon accounted for almost half of all Brazil’s mineral exports, and it protected more than 800,000 hectares (2m acres) of rainforest in the state of Pará in partnership with Instituto Chico Mendes de Conservação da Biodiversidade. Vale said it “reaffirms its commitment to transparency and sustainable mining, promoting socioeconomic development and conservation in the areas where it operates”.
Norsk Hydro said it had been established since 1905, with social responsibility as part of its culture. However, the move from joint venture ownerships to becoming an operator of large plants in remote areas of Brazil had been a steep learning curve. “We work closely with the communities where we operate. After the Brazil rainfall in 2018, we realised our relationship and trust from our neighbours wasn’t as good as it should have been, so we have made efforts to improve our dialogue with local communities. We focus in particular on enabling young people to get an education, and on improving and implementing new technologies in our operations to reduce our impact,” it said.
Amaggi, the largest private producer of soya beans in the world, said it did not recognise the Guardian’s estimates of financial data because they were not based on a precise tool. The Brazil-based firm said it did not sell from areas deforested after 2008 in the Amazon biome, and that it ran social investment projects through foundations, including efforts to improve food security. During the pandemic, it donated more than 150,000 staple food kits.
The grain trader Cargill, the biggest privately owned company in the US, said it had accelerated its commitment to eliminate deforestation in its soya supply chain in the Amazon and two other biomes by 2025. The multinational said it was investing significantly in ending deforestation in South America by running programmes and training to help farmers, increasing technology to improve traceability, and investing in teams in Brazil and throughout South America to accelerate deforestation efforts.
A soya-bean field south of the city of Santarém. Photograph: Daniel Beltrá/Greenpeace
Minerva Foods, which operates numerous slaughterhouses in the Amazon, said it monitored the land use of its direct cattle suppliers and worked to get them into a programme to measure and reduce carbon emissions. The company said it used the best available technology to ensures compliance with environmental and land tenure regulations.
Marfrig told the Guardian that under a programme launched in 2020, it now monitored 100% of its direct suppliers, while for indirect suppliers the traceability rates reached 80% in the Amazon biome and 74% in the Cerrado biome. “Marfrig has been recognised as the leading animal protein company in various rankings, indices, lists and reports that serve as benchmarks for evaluating ESG [environmental, social and governance]policies and practices in recent years,” it said.
Agropalma said it had a long history of preserving nature and respecting the communities close to its operations. “We are committed to zero deforestation: through a strict no-deforestation policy, since 2002, Agropalma no longer converts forests into palm plantations,” it said. It noted it also had a longstanding partnership with Conservation International to monitor the biodiversity in its forest reserves.
JBS disputed the Guardian’s analysis but declined to comment further.
Research by Gisele Lobato, Pablo Pires Fernandes, Andrew Downie, The Mining Observatory, Refinitiv, Imazon and Trase.
