* Investigation looks at land use, forest allegations
* Salobo, Sossego copper mines among Vale’s largest
* Probe is prosecutor’s 2nd Vale-related move this week
By Sabrina Lorenzi
RIO DE JANEIRO, May 30 (Reuters) - Brazil’s Vale SA , the world’s second-largest mining company, faces an investigation of two Amazon copper mines after allegations that it improperly used Indian lands and failed to replace forest cut to build a power line, a Brazilian prosecutor told Reuters on Wednesday.
The prosecutor’s office is looking into the Indian land issue at Sossego, Vale’s biggest-producing copper mine, with 109,000 tonnes of output in 2011.
Vale said in an email that it was not informed of the details of the prosecutor’s investigations but added that its copper mining projects were at least 50 km (30 miles) from the Cateté and Djudjêkô Indian settlements and outside of the Xikrin reservation in which they reside.
The prosecutor is also looking into the forestry issue at the $2.83 billion Salobo mine, which is in the start-up phase.
Vale said that any suppression of vegetation near Salobo was legally conducted under the authorization of the environmental regulator with jurisdiction in the region.
Salobo is designed to produce 100,000 tonnes of copper concentrate a year, according to Vale’s website. An expansion doubling output to 200,000 tonnes a year, surpassing Sossego, is scheduled to be complete in the second half of 2013.
The investigation is the second action against Vale this week by prosecutor Andre Casagrande Raupp of the Federal Prosecutors Office in the northeastern state of Para.
On Monday, Raupp filed a civil suit against Vale, Brazil’s Indian affairs foundation and the environmental secretariat of Para, seeking to suspend activities at Vale’s $2.65 billion Onca Puma nickel mine, also in the Amazon.
The Onca Puma suit alleged that Vale failed to meet obligations to two Indian tribes in the region.
Vale is the world’s largest producer of iron ore, the main ingredient in steel, and the second-largest producer of nickel, whose main use is making stainless or corrosion-resistant steel.
No charges have been filed in the Salobo or Sossego investigations.
Vale’s spokeswoman said that the company is awaiting formal notification from the prosecutor’s office and is ready to provide any clarification needed.
Raupp and other federal prosecutors have wide independence to investigate and charge companies and individuals for alleged violations of the law.
Many prosecutors have come under criticism from business and government leaders for overzealous prosecutions.
Environmental and community groups have sought out prosecutors to press their claims.
A federal prosecutor in Rio de Janeiro state is seeking 40 billion reais ($20 billion) from Chevron and Transocean and has filed criminal charges against 17 of their employees that carry jail terms of up to 31 years as a result of a November oil spill.
An estimated 2,400 barrels of oil never reached Brazil’s coast, was cleaned up within days and resulted in no deaths, injuries or measurable harm to wildlife.
Vale preferred shares, the company’s most traded class of stock, fell 0.57 percent to 36.39 reais in late afternoon trading in Sao Paulo.
Copper for delivery in three months fell 2.11 percent to $7,477.50 a tonne in London trading, its lowest price in nearly five months.