August 14, 2015 / 3:31 PM / 4 years ago

UPDATE 2-Vale halts Amazon nickel mine output after court order

(Recasts to focus on mine stoppage, adds Vale comment)

RIO DE JANEIRO, Aug 14 (Reuters) - Vale SA stopped operations at its Onça Puma nickel mine in Brazil’s Amazon after a Brazilian federal court on Friday ordered the halt because of disputed payments to indigenous communities.

Vale’s operations in Pará face regular legal and protest action by native Brazilian groups seeking better schools, health care and other public services.

Onça Puma, in Ourilândia do Norte, is part of a complex of mines operated by Vale in the state’s Carajas region. The mine produced 5,900 tonnes of finished nickel in the second quarter, or about 8.8 percent of Vale’s finished-nickel output.

The most common protest by indigenous groups has involved blocking Vale’s rail line between Carajas and the Atlantic Ocean.

As part of its ruling, the court ordered Vale, the world’s second-largest nickel producer, to deposit 1 million reais ($287,000) for each indigenous village in the area until it establishes a compensation program for the communities.

Vale said in a statement that it is duly licensed to operate the Onça Puma mine, but that it has run into difficulty completing a study of the indigenous lands approved by Brazil’s FUNAI Indian agency.

Vale also said it faces difficulty implementing its approved basic environmental plan in indigenous areas because the native peoples are blocking access to their lands unless Vale agrees to make cash payments to their groups.

The license requires Vale to work with the native groups to establish mitigation measures on indigenous lands for potential environmental problems that the mine might cause, but it does not require that Vale make direct cash payments to the communities in order to carry out that work, Vale added.

Vale officials have long complained that despite working closely with native groups and supporting cultural and social projects, they are being asked by indigenous peoples to finance services that are properly the responsibility of Brazil’s federal and state governments, not Vale.

Vale said it will challenge the ruling in order to restart operations.

Nickel, a metal that is both hard and malleable, is used primarily to make steel and other alloys rust resistant. Rio de Janeiro-based Vale is also the largest producer of iron ore, the main ingredient in steel. (Reporting by Jeb Blount; Additional reporting by Reese Ewing; Editing by W Simon and Dan Grebler)

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