Brazil’s 450-MW Capim Branco inaugurated

A group led by mining company Companhia Vale do Rio Doce (CVRD) opened the 450- MW Capim Branco hydroelectric project December 5 in Brazil’s Minas Gerais State.

The 1 billion reais (US$463 million) investment comprises two power stations, 240-MW Capim Branco 1 and 210-MW Capim Branco 2, on the Araguari River.

CVRD, the world’s biggest iron ore miner, plans to use the project to ease an energy bottleneck, helping drive a mining expansion that faces environmental curbs.

Other members of the Capim Branco consortium are Minas Gerais utility Companhia Energetica de Minas Gerais (Cemig), base metals producer Votorantim, and Suzano Papel e Celulose, part of Comercial e Agricola Paineiras. Brazil’s development bank, BNDES, approved 950 million reais (US$330 million) in 2004 for CVRD to build the project.

CVRD President Roger Agnelli told a news conference that environmental bureaucracy is blocking new energy projects and that CVRD would not achieve its target of producing half the energy it consumes.

“You can’t have 50 people managing the environment — there should be only one and the rules should be clear,” Agnelli said.

Delays of Estreito, Santa Isabel projects cited

He said environmental problems were delaying the 1,087-MW Estreito and 1,087-MW Santa Isabel projects on the Tocantins River in northern Brazil. (HNN 11/7/06) But, he said, the situation is easier in the southeastern state of Minas Gerais where CVRD is investing US$1.3 billion in energy and mining projects this year.

“In Minas, we manage to execute projects … the rules are clearer,” he said, adding that CVRD invested 130 million reais (US$60.16 million) to mitigate social and environmental effects of Capim Branco.

Agnelli said Brazilian energy costs are the third highest in the world, making Brazil less competitive. CVRD has stakes in eight hydroelectric stations with combined capacity of 2,500 MW.

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