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Iron Ore|Mining|Projects|Safety|SECURITY|Steel|Waste|Environmental|Waste|Operations
Iron Ore|Mining|Projects|Safety|SECURITY|Steel|Waste|Environmental|Waste|Operations
iron-ore|mining|projects|safety|security|steel|waste-company|environmental|waste|operations

Vale dam fallout deepens with mine closure and blocked funds

19th March 2019

By: Bloomberg

  

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RIO DE JANEIRO – Vale’s shares declined on Monday as the world’s biggest iron-ore producer faces continued backlash from Brazilian authorities after a deadly mining accident in January.

Rio de Janeiro-based Vale was ordered on March 15 to shut its Timbopeba mine in Minas Gerais state, which produces 12.8-million tons of iron-ore a year, due to safety concerns. On Monday a court ordered the company to freeze one-billion reais ($264-million) in funds as compensation for affected communities in the state. Last week prosecutors took a separate action, seeking guarantees of 50-billion reais for environmental restoration. Vale said in an email that it isn’t aware of the latest request.

Vale fell 0.4% to 50.33 reais in Sao Paulo at 4:18 p.m. local time, while rival iron-ore producers Anglo American and BHP climbed 2.1% and 2.9%, respectively, in London.

Since the Brumadinho dam accident that left more than 300 people dead or missing on January 25, Vale has shut in more than 80-million tons of annual iron-ore production at projects that use similar tailings dams as the one that ruptured. While the company has said some of those losses can be offset by operations elsewhere, analysts are predicting the output curbs will push the market into a deficit this year.

Vale said Monday it had stopped using two additional retention dams in Minas Gerais at the request of state authorities. The stoppages at Minervino and Cordao Nova Vista won’t have a significant impact on mining operations, as the waste is being directed to other structures, Vale said.

Iron-ore futures in China climbed as much as 2.9% on Monday.

Vale said the dam at Timbopeba was inspected on March 14 by experts from the national mining agency, who didn’t find any “relevant anomaly that puts its security at risk.” The Brazilian outages have left the global iron and steel industry trying to gauge how much production will ultimately be lost as Vale’s remaining mines face scrutiny.

“Vale may continue to face volatility in the short-term related to unexpected stoppages in operations,” Banco Santander SA analyst Gustavo Allevato said in a research report Sunday.

Edited by Bloomberg

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