New Delhi, May 19 -- A highly contested mining project in the Brazilian Amazon rainforest operated by Canadian company Belo Sun is expected to reach a key development Wednesday, when a Brazilian court will rule on whether to uphold a decision that could advance the project.

The court in Brasilia will determine whether the federal government or the northern state of Para, where the mine is planned, has authority to grant environmental licenses for the project.

Belo Sun has sought since 2012 to establish the Volta Grande gold mine on the banks of the Xingu River in Para state. The site lies about 20 kilometers (12.4 miles) from Belo Monte, the world's third-largest hydroelectric dam, whose operations have reduced the river's flow and seve...