Brazilian Miners Wait for Payday After Diet of Bitterness

They were portrayed as human ants, scrabbling by hand for untold riches in one of the most inhospitable and violent places on earth. During the early eighties Senastao Selgado's photos of the gold miners of Serra Pelada, published throughout the world, became iconic in their representation of the dangers of Brazilian small scale gold mining and the desperation of its practitioners, the garimpeiros.

After the mines were closed, no one seemed to care about their plight. But now a New York Times journalist has revisited what was once the most notorious mine site on the planet. And - surprisingly - he's found former miners still campaigning for compensation, a foreign company supposedly interested in re-opening the mine, and the notion of untapped new riches still pungent in the air.

Brazilian Miners Wait for Payday After Diet of Bitterness

By Larry Rother, The New York Times

August 19 2004

Serra Pelada, Brazil, - The gold that was extractable by hand, more than half a billion dollars worth, was mined out long ago. But the prospectors who still linger in this forlorn and neglected corner of the Amazon jungle refuse to give up their dreams of yet another lucky strike.

Nearly a quarter of a century ago, after the discovery of some of the biggest nuggets on record anywhere started a gold rush, great wealth was generated for a fortunate few here, with great sacrifice and suffering for others. During the early 1980's, more than 110,000 prospectors flocked to this site, which at its peak was said to be not only the largest open- air gold mine in the world, but also the most violent and chaotic.

Today, Serra Pelada is home to no more than 8,000 people, mostly prospectors who have no other place to go or who cannot afford to leave. The 300-foot-deep pit from which they earned their precarious livelihood is now flooded, but even so, they envision a pair of windfalls just around the corner.

"We've been eating bitterness for 20 years, but now we've got paradise in sight," Genesio Donizete, an official of the miners' cooperative here, said enthusiastically. "The government knows this is a powder barrel that could explode at any moment, and it is finally going to do the right thing by us."

Mr. Donizete was referring to a multimillion-dollar lawsuit that has been wending its way through Brazilian courts since 1986. The cooperative charges that the government agency that had a legal monopoly on purchases of precious metals here systematically understated the degree of purity of the gold it bought from miners.

As a result of that sleight of hand, which the government now acknowledges, a ton of gold went unrecorded and unregistered and eventually became property of the state. Significant amounts of platinum, silver and palladium, an element used in armaments that fetches an even higher price than gold, were also recovered and sold.

With interest and adjustments for inflation, the value of the hoard has surpassed $50 million. Though courts have ordered the Federal Savings Bank to pay that sum to miners who worked at Serra Pelada in the early 1980's, the decision has repeatedly been appealed, and lawyers familiar with the case describe the miners' hopes as exaggerated.

"Serra Pelada is basically a hospital for people infected with gold fever," said Sergio Frazão do Couto, who has represented the main miners' cooperative at various stages of the proceedings. "The production of gold has stopped, but they still retain the illusion that they are going to become millionaires overnight."

In 1992, the Brazilian government declared Serra Pelada a national historic reserve, effectively ending any possibility of prospecting legally here. But in 2002, the Brazilian Congress overturned that decision and gave the miners title to the original pit and the area around it.

Luciano Rodrigues Sardinha is a former solderer who came here in 1982 from Iraq, where he had been working on a construction project for a Brazilian company. At one point, he had recovered more than 30 pounds of gold and, he said, could afford to send his children to the United States to be educated.

But he invested his earnings back in the mine and eventually lost his entire stake. He now lives in a small shack at the edge of the pit.

"I had 10 miners working for me back then, owned a lot of equipment, too, and used to fly in and out instead of taking the road," Mr. Sardinha, now 52, recalled. "I'm still alive, I'm still battling, but I'm barely surviving, so that money can make a big difference for me."

But it is not only the money from the government stash that is firing hopes here. Miners' groups have more recently been bedazzled by the $240 million down payment that an American mining concern has promised to pay for the right to resume prospecting in a 247- acre area that the miners now legally control.

Late in June, the American company, Phoenix Gems Ltd. of Waterford, Mich., signed a contract that calls for production to resume here by the end of the year. Though some veterans here question whether enough gold remains in accessible locations to be extracted profitably, Brent Smith, the leader of the consortium, talks of an additional 250 tons of gold.

"Core drill samples and other documents show a tremendous amount of gold underneath the original pit," Mr. Smith said in a telephone interview from his headquarters outside Detroit. "That gold was not extractable manually in the early 1980's, but through current technologies with the proper equipment we definitely believe we can get it out."

But the tensions between two rival cooperatives claiming to represent prospectors have grown. Late in 2002, for instance, the leader of a group that favors expanding the list of miners who should share in any payout from Serra Pelada was fatally shot.

"Any money from the mine obviously belongs to the owners, but just who are the owners?" said the group's treasurer, Alexandre Rodrigues. "The prospectors. But which prospectors? That's the problem."

Mr. Smith said: "Most of the men are now in their 50's and 60's, which means they are too old to be involved in any mining activities. They're just along for the ride and will be collecting royalties from what we extract, payments which will go on indefinitely, as long as there is production."

As they wait for the big payday, some miners are working the tailings, or refuse, produced by the pit, somewhat clandestinely. Others grow their own food to get by, or perform odd jobs.

"This money is our retirement, and I'm not leaving until I get my share," said Alfio Zucatelli, an electrician who came here from São Paulo in 1983. "We suffered one calamity and humiliation after another, and I'm sure that one day the government and the justice system will recognize that.'