By Chris Arsenault

RIO DE JANEIRO (Thomson Reuters Foundation) - Indigenous people living in Brazil's rainforest have welcomed a decision by the national environment agency to cancel a proposed mega-dam in the Amazon which they say would have displaced communities while opening the sensitive region to logging.

Tribes will now be able to better protect the rainforest and continue living on the land because new roads and other infrastructure will not unlock the area's pristine landscape for loggers, said Cacique Celso Tawe, a leader of the indigenous Munduruku Indians.

His 12,000-strong community had been at the forefront of opposing the $9.4 billion Tapajós hydro-electric dam project, which would have flooded 376 square kilometers (145 square miles) of their ancestral land.

"The dam would only have brought terrible things for our people," Tawe said, following the decision on Thursday by Brazil's environmental regulator Ibama to halt the project.

"It was going to flood our forests and our cemeteries," he told the Thomson Reuters Foundation on the sidelines of a conference in Rio de Janeiro.

"They say it's development, but the poor people would have become poorer if the dam was built."

Tawe's tribe depends on the Tapajós river and surrounding lands for food and livelihoods.

Its members would have gone hungry if the dam had been constructed, Tawe said, adding that his community plays a key role in defending the Amazon rainforest.

"We want our Earth protected," he said.

RISKS OVERLOOKED

Forests managed by indigenous people who have full land rights are some of the best-protected ecosystems in Brazil, according to scientists.

"Indigenous lands were particularly effective at avoiding deforestation in locations with high deforestation pressure," U.S. and Brazilian scientists wrote in a 2013 study analyzing 292 areas in the Amazon.

Ibama shelved an environmental license request for the Tapajós dam project, saying its backers had not presented information in time to show it would be socially and environmentally sustainable.

"We have been awaiting such a welcome announcement from the Brazilian government for more than a decade," Christian Poirier from conservation group Amazon Watch said in a statement.

Some of the risks identified by Ibama but neglected by the power firms backing the project included climate-changing emissions, consequences for local people, and impacts on biodiversity, aquatic ecosystems, migratory fish and fisheries, the statement added.

(Reporting by Chris Arsenault; editing by Megan Rowling; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking and climate change. Visit https://news.trust.org)