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.
Brazil’s Minas Gerais state authorities and federal prosecutors have asked a judge to order Vale (NYSE: VALE) to pay for economic losses and other damages stemming from last year’s deadly Brumadinho tailings dam disaster, which killed 270 people.
The authorities have sent a joint petition seeking a judge’s order for the miner to freeze 26.7 billion reais ($4.78 billion) in assets for eventual restitution to the state.
They are also seeking 28 billion reais ($5.01 billion) in collective “moral and social” damages.
Authorities have sent a joint petition seeking a judge’s order for the miner to freeze assets for eventual restitution to the state
“This amount corresponds to the net profit distributed to shareholders in 2018, an amount that could have been applied to guarantee the safety of the dams,” prosecutors said.
According to Vale, $1.9 billion have already been presented in guarantees and judicial deposits.
“Vale reinforces that this is not a new public civil action but claims in the lawsuit, which has been in progress since January 2019,” the company said in a press release.
Vale said that it is not formally aware of the requests made and will comment on them in the records of the proceedings, within the period stipulated by the judge.
In July, a court decision suspended $1.5 billion in legal deposits that had been previously required in a case related to the deadly dam collapse.
In May, the city of Brumadinho suspended Vale’s operating license after health agents said that the company’s onsite activities had “not respected the rules of social isolation.”
A Minas Gerais state court in Brazil later revoked the decree after the company argued that the suspension was issued with the main purpose of serving as retaliation for non-payment of emergency aid to the entire population of the city.
The Fire Brigade of Minas Gerais will resume the search for still missing bodies of 11 victims of the disaster.
Earlier this year, state prosecutors charged Fabio Schvartsman, the chief executive at the time of the burst, and 15 other people with homicide. Schvartsman left his position at the company in March 2019.
