Righting Past Wrongs Colossus Does Well by Doing Good in Brazil By Ted Niles
By the time 60 Minutes aired its story about Brazil’s Serra Pelada gold mine in 1985, it had gone, in Ann Wilkinson’s words, “completely Wild West.” The site of the largest gold rush in Latin American history, hordes of mud-encrusted garimpeiros produced over two million ounces of gold from the remote Amazonian pit. The largest gold nugget found reportedly weighed 15 pounds. But, the VP of Investor Relations for Colossus Minerals TSX:CSI says, “This gold rush ended like many, badly.” The Brazilian army had taken over operations shortly after the deposit’s discovery, and CVRD—the state mining arm, since privatized and now known as Vale SA—discovered early on that in addition to Serra Pelada’s bonanza gold grades, it was also rich in platinum and palladium. It tried to reserve this information to itself.
“Once the hard-to-keep secret got out,” Wilkinson relates, “that CVRD wasn’t paying the artisanals for the platinum and the palladium in the deposit—that it was, in effect, stealing from them—all hell broke loose. The garimpeiros refused to get out of the pit; proper setbacks were not being maintained; lawlessness ensued; people were dying. It had to stop, and the Brazilian government, through CVRD, simply stopped dewatering the pit.”