Brazilian biodiversity hotspot under threat as pollution-linked chilean pulp giant arauco builds $4.6 billion mill

Chilean pulp and paper giant Arauco has broken ground on a massive new facility in Brazil’s biodiverse Cerrado region, sparking fierce opposition from environmental experts who warn the project could transform the ecologically rich landscape into a barren “green desert” of eucalyptus plantations.

The company’s $4.6 billion Projeto Sucuriú development in Mato Grosso do Sul state represents one of Brazil’s largest industrial investments, equivalent to nearly 20% of the state’s entire 2021 GDP. The 8,650-acre facility near the Sucuriú River has already secured substantial international backing, with $850 million in financing from the Interamerican Development Bank and World Bank’s International Finance Corporation. State officials have enthusiastically embraced the project, with Governor Eduardo Riedel praising Arauco as “one of the world’s cleanest pulp companies” during the May 2024 licensing ceremony.

However, Arauco’s environmental track record raises serious red flags. The Chilean company has a documented history of pollution violations, and critics argue its arrival threatens the delicate Cerrado biome—a global biodiversity hotspot home to countless endemic species. Environmental advocates fear the industrial monoculture model will devastate local ecosystems and strain precious water resources in the region.

The controversy highlights a familiar tension between economic development and environmental protection in Brazil. While supporters tout job creation and investment benefits, opponents worry that short-term economic gains will come at an irreversible cost to one of the world’s most important ecological regions, potentially turning living landscapes into sterile eucalyptus plantations.