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The island emerged about 800 thousand years ago, in the area now known as Complexo Vulcânico da Ribeirinha (Volcanic Complex) from a tectonic fracture, the same that led to the Pico Island, called Faial-Pico Fracture that develops over 350 kilometres.

The process of the formation of the island resulted in rock formations that today make up many of the island's landscapes. These formations include basaltic and trachytic lavas combined with pumice and lahars (exclusive mass movements of volcanic regions, formed by the displacement of lava comprised by water and pyroclastic materials along valleys or steep slopes, in the form of avalanche), and many submarine and subaerial scoria cones.

The island consists of two central volcanoes and two regions dominated by fissure basaltic volcanism. Their elevations converge generally toward the centre of the island where opens a large crater abatement, the Caldeira, with an average diameter of 2 kilometres. At the south slope of Caldeira, lies the Cabeço Gordo, which reaches an altitude of 1043 metres.

On the Faial Island occurred three historic volcanic events since its settlement, of which the best known is the eruption of the Capelinhos in 1957/58.

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