Initiation of Claim: In February 2020, the Public Prosecutor’s Office of Minas Gerais (MPMG) filed a Civil Public Action (ACP) against the State of Minas Gerais and the company Anglo American Minério de Ferro S.A. The action challenges the legality of an environmental license granted for the expansion of a mining dam under the Minas-Rio Project.  

The Minas-Rio Project, operated by Anglo American, involves the extraction and processing of iron ore from the Ferrugem and Sapo mountains in Minas Gerais, Brazil, and its transport via pipeline to the Port of Açu in Rio de Janeiro. This large-scale mining operation, which spans various municipalities, has raised significant environmental and social concerns, particularly regarding the safety and resettlement of nearby communities. 

Main Claims: The Public Prosecutor alleged that the license granted to Anglo American violates the Never Again Sea of Mud Law (Mar de Lama Nunca Mais) (Law No. 23.291/2019). This law was enacted in response to the Brumadinho dam disaster that occurred in January 2019 and includes provisions to prevent similar incidents. Specifically, it prohibits the granting of new environmental licenses for projects in areas identified as “self-rescue zones,” which are considered high-risk areas due to their proximity to tailings dams. 

The Public Prosecutor requested: 

1. Nullification of the environmental license issued for the dam expansion. 

1. Suspension of new license grants until the existing issues are resolved. 

1. Removal of the affected communities (specifically São José do Jassém, Água Quente, and Passa Sete), based on collective indemnification and resettlement parameters that preserve social, emotional, economic, and community relationships, ensuring that living conditions are equal to or better than before the project’s initiation. 

1. Financial guarantee that Anglo American provides a financial guarantee for the reassessment and relocation process. 

In response, the State of Minas Gerais argued against the interim measures sought by the Public Prosecutor, contending that the dam’s license was validly granted, that the “Mar de Lama Nunca Mais” Law did not apply retroactively, and that there was no immediate risk from the already constructed dam. Anglo American supported this stance, pointing out that the case overlapped with another public action and that the licensing process had complied with regulations and approvals in place before the new law’s enactment. They asserted that the dam was safe and that the new law should not retroactively affect previously granted licenses, with risk levels properly managed. 

Court Decisions: In October 2022, the Court of Justice of Minas Gerais issued a decision on the Provisional Measures, partially granting the Public Prosecutor’s request. While the judge did not fully grant the requested injunctions, such as nullifying the license or prohibiting new licenses, they ordered Anglo American to present a comprehensive collective resettlement plan for the affected communities (Água Quente, Passa Sete, and São José do Jassém) within 60 days. A daily fine of R$ 50,000 was imposed for non-compliance. 

Following this decision, Anglo American pursued several appeals. The State of Minas Gerais defended the legality of the licensing process and contested the Public Prosecutor’s claims. In response, the Public Prosecutor argued that environmental licensing rights are not absolute and that the new law should be applicable to present cases. They also criticised the dam’s safety measures, citing insufficient assurances and adverse effects on local communities. 

In September 2023, the Court in Minas Gerais upheld the 2022 preliminary injunction, ordering Anglo American to submit a collective resettlement plan for the communities of Água Quente, Passa Sete, and São José do Jassém within 60 days, and established a daily fine of R$ 50,000.00 for non-compliance. 

Regarding the merits, the Court acknowledged the immediate applicability of Law 23.291/2019 and consequently ruled that the State is prohibited from issuing new environmental licenses for the raising or expansion of the dam owned by Anglo American until the complete removal of communities within the self-rescue zone has been carried out. 

Additionally, the Court ordered Anglo American to facilitate and finance the removal of the communities through collective resettlement. The families will also have the option for individual resettlement through an Optional Negotiation Plan.  

The Court further instructed that the resettlement plan must be negotiated by the parties and involve extensive participation from the communities and their representatives. In addition, the plan must preserve social and emotional connections, along with economic and cultural characteristics, guaranteeing that living conditions are at least as good as before the project began. Finally, the plan must be completed and put into effect within 12 months. 

Following the Court’s decision: The communities began negotiating their resettlement with Anglo American in November 2023. In April 2024, a Preliminary Agreement was signed to pause the Public Civil Action and enable continued negotiations between the parties. As of August 2024, discussions are still in progress.