BRAZIL

BRAZIL

Brazil mining co. cuts off Indian aid after invasion

31st October 2006

RIO DE JANEIRO, Brazil, Oct 31 (Reuters) - Brazilian mining company CVRD said on Tuesday it will cancel $4.2 million in aid it gives Xikrin Indians ach year after tribesmen daubed in war paint invaded its Carajas mine this month to demand more money.

CVRD, one of the world's three largest mining companies, said Brazil's government had failed to prevent "illegal attacks led by Indians" and that the state -- not the private sector -- must ensure the welfare of indigenous groups.

"We can't continue to be blackmailed," Tito Martins, CVRD's head of corporate affairs, told a news conference.

Funai, Brazil's Indian affairs agency, declined comment.

The three-day occupation focused attention on the plight of Brazil's impoverished Indians just days before the election on Sunday in which Presidential Luiz Inacio Lula da Silva won a second term. Indian leaders say Lula should do more to help them.

Many Indians, armed with bows and arrows, wore feather headdresses and loincloths while others chatted on cell phones and drove big pick-up trucks during the October 17-19 invasion.

About 900 Xikrin live about 60 miles (100 km) from the mine, which CVRD says is not on Indian land, in the Amazon state of Para. The social development payments were intended to help avoid conflicts.

CVRD has asked officials to open a criminal investigation against the Indians who took part in the occupation, alleging they kidnapped employees and tried to extort the company.

The company also said it will file a civil lawsuit to recoup $10 million in losses suffered when the 200 Indians occupied the mine, delaying shipments of 650,000 tonnes of iron ore.

The Indian population was an estimated 5 million when Portuguese explorers arrived on the shores of what became Brazil in 1500. Over the centuries they suffered enslavement, extermination campaigns, disease and neglect. They now number about 734,000 in 230 tribes.

CVRD had been giving aid to the Xikrin tribe as part of a $210 million per-year social, educational and environmental projects it funds in Brazil. It will continue funding those other programs.

"It's not CVRD's responsibility (to aid the Indians) but the role of the government," Martins said.

(Additional reporting by Eduardo Lima in Sao Paulo)