RIO DE JANEIRO – As the death toll continues to rise from a fatal accident at a dam owned by Vale, the Brazilian miner’s top management is coming under increased criticism in the highest levels of government.
"There must be punishment," Vice President Hamilton Mourao told reporters in Brazil’s capital on Monday, adding that "if there was any malpractice, recklessness or negligence on the part of someone inside the company, this person has to answer criminally."
Mourao didn’t rule out suspending members of Vale’s board while authorities investigate the dam break in Minas Gerais state that has killed at least 60 people with hundreds still missing. It is the second deadly mining disaster involving Vale in only about three years and the company has come under intense scrutiny since images of death and destruction began flooding the airwaves on Friday.
While Vale has taken steps in recent years to shield itself from state intervention, the government is still indirectly the company’s largest shareholder through a Banco do Brasil pension fund, known as Previ. As Brazil’s largest exporter and a producer of raw materials, Vale is heavily reliant on key agreements with the government like railway concessions, mining licenses, and favorable foreign policy.
Vice President Mourao isn’t alone in his rush to penalise. Prosecutor General Raquel Dodge said Monday that Vale directors could be punished. On Sunday, Renan Calheiros, a candidate for Senate president, tweeted that he supported the dismissal of Vale’s top executives.
Vale’s reputation stands to take an even bigger hit than when the Samarco project had a dam failure that resulted in 19 deaths and caused Brazil’s worst ever environmental disaster. The Brazilian miner was a partner in the mine and was able to sidestep some of the blame, pinning the responsibility somewhat on the venture’s management. Its partner BHP Group also helped shoulder some of the blame.
Vale didn’t immediately respond to requests for comment.
Most Vale executives are relatively new, taking office after CEO Fabio Schvartsman was hired in 2017. The only executives kept on by Schvartsman include CFO Luciano Pires and Peter Poppinga, Vale’s head of iron ore. Poppinga took over the ferrous metals division in 2015. Later that year, Vale’s Samarco Mineracao SA joint venture suffered a tailings dam rupture and Poppinga was targeted in a criminal probe as he sat on the JV’s board of directors.
So far, no Vale or Samarco executives have been convicted of criminal wrongdoing. Both civil lawsuits were also suspended as the company struck a deal with authorities. For some, only a few days into the aftermath of the latest spill, searching for scapegoats seems premature.
"This management is relativity new, blaming this administration seems like an over reaction’,” André Rocha, mining analyst and manager at JBI. “Before pointing out fingers we need to see what happened first.”
Vale has said that regardless of the hit to production, it will continue to pay royalties to Brumadinho, where the dam that broke is located. The company’s CFO said in a press conference broadcast by GloboNews that 100 000 reais will be donated to families of each of the victims of the incident and damages will be discussed later. He also said Vale plans to reassess old mines.