Latest Vale tailings dam breach could affect Samarco talks

Vale CEO Fabio Schvartsman in a helicopter overlooking the breach. Image: Vale

A dam disaster in Brazil that left 60 people dead and over 300 missing last Friday has cast a new light on the safety record of iron ore major Vale.

The failure of an inactive dam at the company’s Córrego de Feijão mine in Minas Gerais echoes the November 2015 Bento Rodrigues dam failure in the same region that saw the Fundão tailings dam burst at the Samarco joint venture between BHP and Vale.

In October 2018, it was announced that Brazilian prosecutors had come to an agreement with BHP and Vale over compensation payments to settle the disaster, which killed 19 people, but the Córrego de Feijão failure may complicate this settlement.

Federal prosecutor Jose Adercia Sampaio said in an interview with Reuters that Vale’s culpability in the latest dam breach could affect the Samarco case.

“We need to investigate what caused this new rupture, if there were the same causes as the Samarco case: a lack of monitoring, incomplete information, neglect,” he said.

Vale’s stock price, which stood at $US15.41 ($21.50) before the dam breach, has fallen to $US11.20 at the time of writing.

Fabio Schvartsman, Vale chief executive officer, released a recorded statement in Portuguese (and translated into English) in the wake of the breach.

“I have no words to describe my grief, my great sadness, my disappointment with what has just happened. It is something beyond and above anything I could have imagined,” he said.

“I want to express my solidarity and say that all of Vale will do whatever possible and impossible to help the affected people.”

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