Vale halts dealings with company over deforestation

SAO PAULO (Reuters) - Brazil's Vale, the world's largest iron ore miner, said on Thursday it had suspended its business with an Amazon-based pig-iron producer accused by the government of illegal deforestation.

Brazil's environment agency said in a report that pig-iron maker Sidepar was using charcoal made from illegally cleared trees in Para state in northern Brazil. Two other pig-iron companies in Para, Cosipar and Siderurgica Iberica, were also identified in the report as breaking environmental laws.

The three companies were responsible for the destruction of 27,300 hectares (105 square miles) of the world's largest rain forest over four years, according to the study by the environmental agency.

Vale said it does not supply iron ore to Sidepar, which is based in Para state in the lower Amazon Basin, but did provide the company with logistical and transport services to ship its pig iron.

Vale came under criticism several years ago for supplying iron ore to producers in Brazil's north who were using illegally cut trees to make charcoal used in the production of pig iron, a key ingredient for steel production.

Officials at all three companies were not immediately available to comment on Vale's statement or the allegations against them.

(Reporting by Leila Coimbra in Rio de Janeiro, Peter Murphy in Brasilia and Reese Ewing; Editing by Stuart Grudgings and Jan Paschal)