Indigenous groups warned of bloodshed after Brazil, which fought off three court rulings, on Tuesday awarded the rights to build the world's third-largest hydroelectric dam in the Amazon rain forest.
The bidding for the $11 billion Belo Monte dam was halted three times before a final appeal by the government allowed the winning bidder, a private-public consortium, to be announced.
About 500 protesters gathered outside the building where the bidding took place to condemn the project, saying it will cause serious social and environmental damages along the Xingu River, which feeds into the Amazon River.
Luis Xipaya, a local native leader speaking from Altamira near the proposed dam site, said 150 Xikrin Kayapo Indians were already en route to build a protest village on the construction site.
"There will be bloodshed and the government will be responsible for that," Xipaya said.
The government dismisses claims that the project will have a negative impact on the environment or the local community.
"Belo Monte is the most studied hydroelectric plant in the world," Mines and Energy Minister Marcio Zimmermann said.
'Avatar' director among critics
Critics include James Cameron, director of the blockbuster movie "Avatar," who has been in the area this month to meet with indigenous leaders.
"Avatar" depicts a fictitious Na'vi race fighting to protect its homeland, the forest-covered moon Pandora, from plans to extract its resources.
Environmentalists and indigenous groups say Belo Monte would devastate wildlife and the livelihoods of 40,000 people who live in the area to be flooded.
Brazilian President Luiz Inacio Lula da Silva insists that the dam is essential, and says it will provide clean and renewable energy to feed increasing demand.
Opponents organized protests across Brazil on Tuesday to condemn the project. Amazon Watch, a San Francisco-based group that works to protect the rain forest and the indigenous people living there, said thousands of people are engaging in coordinated protests in nine cities, including Altamira, which would be partially flooded by the Belo Monte reservoir.
Cameron said the proposed dam "is a very, very important, pivotal battleground" because it will set the stage for the development of 60 more dams.
Environmentalists also argue that the energy generated by the dam will largely go to big mining operations, instead of benefiting most Brazilians.
Sting lobbied in 1989
The moment was reminiscent of 1989, when rock star Sting protested the same dam alongside Indians in an event that helped persuade international lenders not to finance it at a time when Brazil was shuddering under a heavy foreign debt.
But economically booming Brazil no longer needs money from abroad to build the 11,000-megawatt Belo Monte dam — which would be smaller only than China's Three Gorges dam and the Itaipu dam straddling Brazil and Paraguay.
The country has a fragile energy grid that was hit last year by a blackout that darkened much of the nation. Belo Monte would supply 6 percent of the country's electricity needs by 2014, the same year Brazil will host soccer's World Cup and just two years before Rio de Janeiro holds the 2016 Olympics.
Luiz Carlos Tremonte, head of a logging industry group in the state where the dam is planned, asserted that the dam makes environmental sense as a source of renewable energy.
He accused unnamed foreign interests of attempting to block Brazil's development.
"The issue of hydroelectric plants is not environmental, it is geopolitical," he said. "There are many interests at stake, interests of foreign countries and organizations that are fighting against Brazil's development."