Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Samarco resumed activities on Friday, five years after the Fundão dam tragedy.
The company has announced the commissioning of operations at the Germano Complex in Mariana, Minas Gerais state, with the operation of one of its three concentrators and the new tailings filtration plant, which will allow 80% of the total tailings to be dry stacked.
On November 5, 2015, the dam, owned by Samarco – controlled by Vale and BHP – burst, releasing 39.2 million cubic meters of tailings waste in the Rio Doce Basin, killing 19 people. It was Brazil’s biggest environmental disaster.
Brazilian prosecutors said in October that the Renova Foundation, created by the miners for the reparation of the damages did not deliver on any of its promises.
Samarco received the Collective Operational License to resume activities in October 2019.
According to the company, the resumption of activities will be gradual, with the pelletizing plant in Ubu, Espírito Santo state, starting production in the next 15 days.
The company expects initial production of 8 million tonnes of iron ore per year.
In 2015, the year of the tragedy, the company produced 25 million tonnes of iron ore.
Samarco said it has developed a new security system, which includes a monitoring and inspection center. The company also conducts tests to reuse the tailings waste in construction. Four kilometers of roads in the Mariana region have already been paved with reused material.
“We have lived through learning for the past five years,” said Samarco CEO Rodrigo Vilela.
Despite the destruction caused by the dam’s burst, Mariana authorities were eagerly awaiting the resumption of mining activities. Until the tragedy, 89% of the city’s tax collection came from Vale and Samarco. The disaster led to an unemployment rate of 30%.
“The population has a lot of respect for Samarco due to the company’s operating time in the region, the mayor of Mariana, Duarte Junior, told MINING.COM. “We hope the resumption generates jobs in the city.”
Samarco currently has approximately 1,400 employees.
Samarco said it is committed to remediate and compensate the victims and that up to September 2020, over $1.9 billion had been allocated as compensation.
