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.
Brazilian President Luiz Inacio Lula da Silva on Thursday criticized mining giant Vale for “not having done anything to repair the destruction” caused by the collapse of a tailings dam in Brumadinho in 2019.
Lula’s comments come as Reuters reported last week, citing a source familiar with the matter, that the leftist president wants former Finance Minister Guido Mantega to be appointed to a board seat at Vale or even as its chief executive.
Markets have been reacting negatively to the possibility of Mantega’s appointment, with shares of the company down 10% so far this year, as it would suggest government influence over the firm that was privatized in the 1990s.
“Five years and Vale has done nothing to repair the destruction caused,” Lula said in a post on social media platform X.
“Support for victims’ families, environmental recovery and, above all, inspection and prevention in mining projects are needed so we do not have new tragedies.”
Jan. 25 marks the fifth anniversary of the Brumadinho disaster, when the collapse of a tailings dam at a Vale-owned mine unleashed a wave of mud killing 270 people and damaging homes, forests and rivers.
Vale, which expects expenses related to the Brumadinho and the similar 2015 Mariana disaster to reach 3 billion reais ($610.10 million) this year, did not immediately respond to a request for comment.
Vale last week published a report saying it “remains committed to Brumadinho repairs,” adding it has so far reached deals with more than 15,400 people to pay damages. It also noted it has been decommissioning its upstream tailing dams like the one that collapsed in Brumadinho.
($1 = 4.9172 reais)
(By Gabriel Araujo and Marta Nogueira; Editing by Steven Grattan and Matthew Lewis)
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