Court suspends Amazon hydrodam license on native demands

A Brazilian court suspended the operating license for the Belo Monte hydroelectric dam, one of the world's largest, just weeks before owner Norte Energia SA planned to start electricity generation, prosecutors said on Thursday.

Judge Maria Carolina Valente do Carmo of the Federal Court in Altamira, Para, said the license will be suspended until Norte Energia and Brazil's government meet a previous license requirement to reorganize the regional office of Funai, the national Indian protection agency.

A judge had already ordered the government and Norte Energia to carry out the Funai restructuring work in 2014, so Valente do Carmo also fined the government and the company 900,000 reais ($225,000) for non-compliance.

The Belo Monte dam, one of the most controversial ever constructed in Brazil, is located on the Xingu River near Altamira.

Belo Monte will have an installed capacity of 11,233 megawatts. Its average output, though, will only be about a third of that as the original reservoir was greatly reduced at the request of native groups and environmentalists.

These critics objected to the dam blocking one of the last free-flowing major tributaries of the Amazon. They also opposed an early reservoir plan that would have flooded thousands of square kilometers of virgin rain forest.

Tens of thousands of workers moving to the region to build the massive project also raised fears that many would stay and expand illegal logging, mining and farming in the rainforest.

Brazil is counting on the dam, now several years behind schedule, to help fill a power gap in Brazil's south caused by delayed projects, rising demand and recent drought.

Norte Energia, which is building and will operate the dam, is a consortium led by Brazil's state-run utility Centrais Eletricas Brasileiras SA, or Eletrobras; Centrais Eletricas de Minas Gerais, or Cemig; Brazil's Neoenergia SA and miner Vale SA.

Norte Energia said it had no comment on the ruling because the company has not been formally notified of its contents.

The Funai requirements have been part of the rules governing operations at Belo Monte since the dam project received its preliminary license in 2010, prosecutors said in a statement.

Currently, the Funai offices in Altamira are closed and the agency has seen the number of workers in the region fall by nearly three-quarters. In 2001 there were 60 Funai employees there, today 23. All the Funai stations in indigenous villages near the dam have been closed.