Brazilian environmental regulator Ibama rejected a licenseapplication lodged by Votorantim group unit Sul-Americana de Metais' for itsVale do Rio Pardo iron ore project in the country's Minas Gerais state, sayingthe proposed tailings dam for the project is not environmentally viable.

The unit, also known as SAM, proposed to build what would bethe largest tailings dam in Brazil with a capacity of 1.3 billion cubic metersas part of the iron ore project, beating the Eustáquio dam in the same state —the country's current largest tailings dam with a capacity of 750 million cubicmeters, Business News Americas wrote April 4 citing a Reuters report.

SAM plans to build two other waste deposits in Minas Geraisfor the Vale do Rio Pardo project, with the three proposed dams to have acombined capacity of 2.4 billion cubic meters.

According to Ibama, SAM's project also includes a pipelineand a dewatering station in the neighboring state of Bahia. Furthermore, theproject was envisioned to have a production capacity of 25 million tonnes perannum.

Ibama's rejection of the application is said to follow aMarch 30 decision by federal prosecutors in the state of Minas Gerais, whourged that only mining project applications with the proper ecological wastemanagement plans should be approved.

The Votorantim group also owns