Vale to Reduce Output and Shut Down Dams Following Brazil Disaster, Reports Reuters

By Jake Spring and Gram Slattery

BRASILIA/BRUMADINHO, Brazil – Vale SA, the world’s largest iron ore miner, announced on Tuesday its plan to idle up to 10 percent of its ore production as it moves to decommission 10 additional dams similar to the one that collapsed last week, resulting in the deaths of many workers and nearby residents.

Chief Executive Fabio Schvartsman stated that the operations associated with these dams would be temporarily halted, with an investment of 5 billion reais (approximately $1.3 billion) allocated for their decommissioning over the next three years.

This decision follows the arrest of several Vale executives in connection with the catastrophic failure of a tailings dam in Brumadinho, which unleashed a wave of mining waste that has claimed at least 84 lives, with hundreds still unaccounted for. The incident has reignited concerns about Vale’s commitment to safety, particularly in light of a similar disaster that occurred just over three years ago at a nearby mine the company co-owned.

"We decided the company should, once and for all, do what it takes to remove any doubt about the safety of Vale’s dams," Schvartsman told reporters in Brasilia.

The compromised Brumadinho dam was one of 19 "upstream" tailings dams owned by Vale in the state of Minas Gerais, constructed using a method that has been banned in Peru and Chile due to safety concerns. Vale had already initiated decommissioning of nine of these dams. Documents seen by reporters indicated that the company had explored but ultimately chose not to implement various measures that could have mitigated or prevented the disaster.

Schvartsman confirmed that Vale’s board had sanctioned the decision to decommission the remaining upstream dams, which will also involve relocating 5,000 workers to other areas of the company. These operations currently generate significant iron ore and pellet production, with Vale projecting total iron output of 390 million tonnes for the year.

ARRESTS FOLLOWING DISASTER

Earlier on Tuesday, authorities arrested three employees of Vale, including two senior managers at the Corrego do Feijao mine, as part of a criminal investigation into the disaster, which may have resulted in more than 300 fatalities. Vale stated it is fully cooperating with the investigation, maintaining that the mining complex was built according to regulations and that the dam had been deemed stable just two weeks prior to its collapse.

Two engineers from a German firm, who had certified the safety of the Vale dam, were also taken into custody in Sao Paulo. Investigators in Minas Gerais issued multiple arrest warrants and search warrants, suspecting murder, document falsification, and environmental crimes.

The dam failure has had dire consequences in the affected region, with firefighters reporting at least 84 confirmed deaths and another 276 individuals still missing and presumed dead. The ongoing search and recovery efforts have placed immense strain on first responders and volunteers.

José Eustáquio da Silva, who oversees cemeteries in Brumadinho, has been working tirelessly alongside teams to prepare new graves for the victims. "All I see is sadness and hopelessness," he remarked while surveying the scene dotted with fresh graves.

COMMUNITY OUTRAGE

Vale’s Chief Financial Officer Luciano Siani assured that the company is taking every possible action, including providing financial assistance to the bereaved, making additional tax payments to local authorities, and investing in safety measures for its dams. Despite these efforts, the residents of Brumadinho remain outraged as the grim reality of the disaster unfolds before them.

Following a previous tailings dam collapse in 2015 at a mine partially owned by Vale, many in Brazil view this latest tragedy as inexcusable. José Francisco Mateiro, treasurer of the local mining union, blamed the corporation and authorities for endangering the lives of workers. "They call it an accident, but the design of those dams was premeditated," he said, noting that there have been longstanding warnings about the risks associated with mining dams.

Nevertheless, prosecutors and politicians continue to voice their discontent, with government ministers criticizing Brazil’s mining regulations. The country’s top prosecutor has called for criminal charges against Vale and holds executives personally responsible.

On Monday, a presidential task force considered the possibility of removing Vale’s management, but by Tuesday, government officials appeared to step back from that position. "There aren’t conditions for any degree of interference. It would not be a good signal to the market," said Onyx Lorenzoni, the presidential chief of staff, during a press briefing.