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Auction for Amazon Commercial Logging Lures 8 Bidders (Update1)Tags: brasil resources government

Brazil's first government auction of commercial logging rights in the Amazon, part of an effort to end illegal deforestation, lured eight bidders.

The Environment Ministry will start reviewing the bids today from companies seeking to explore 96,360 hectares (238,100 acres) of national forestland over 40 years, said Tasso de Rezende Azevedo, head of Brazil's National Forestry Service. The forestry service expected the rights to sell for a minimum of 2.8 million reais ($1.6 million) a year.

The auction marks the first time the Brazilian government has granted licenses for commercial logging on public forestland, Azevedo said. It's part of an effort to reduce illegal deforestation of the Amazon rainforest, which spans nine nations and covers 5 percent of the world's land.

This is our first test,'' Azevedo said in a phone interview from Brasilia. The ministry's planallows us to auction one million hectares this year.''

Only Brazilian companies were allowed to bid to explore 40 percent of the Jamari National Forest, in the northern state of Rondonia. The area, divided into three blocks, can produce about 2.9 million cubic meters of wood a year, the forestry service said.

As much as 80 percent of all logging in Brazil's Amazon is illegal, environmental group Greenpeace said on its Web site. Brazil has 193 million hectares of national registered forests, 92 percent of which are in the Amazon.

The rate of deforestation declined by 20 percent from August 2006 though July of last year, compared with the same period a year earlier, the Environment Ministry said in a Dec. 6 report.

The winning bidders in today's auction will be able to explore and sell wood, seeds and fruits, though they can't trade mineral or animal products or search for water resources. The deadline to submit a bid was today, and Brazil hasn't set a date to announce the auction results, Azevedo said.

© Bloomberg (USA) -- 2008-01-09
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