Abitibi Metals boosts resource by 62% at B26 polymetallic deposit in Quebec
Indicated resources increased to 11.3 million tonnes from 6.9 Mt.
Vale SA managed to free all 39 workers trapped in an underground mine this week. Now the work begins to convince investors the incident was a one-off.
Sunday’s accident at the Sudbury, Ontario, mine is particularly jarring for a company still trying to reinvent itself as a responsible corporate citizen in the wake of two tailings disasters. Proving its environmental, social and governance credentials is key to Vale closing a valuation gap with major rivals.
“Episodes like this do not sit well from an ESG front,” said Andrew Cosgrove, an analyst with Bloomberg Intelligence. “They’ve got quite an uphill battle.”
The Sudbury incident invoked memories of the harrowing 69-day rescue of underground miners in Chile 11 years ago. Thankfully, Vale was able to get everyone out safely in less than three days. The company didn’t immediately respond to requests for comment.
The week’s event, caused by an excavator dislodging and damaging the exit shaft, took a huge physical and emotional toll on those involved. Still, it was far less calamitous than the Brazilian dam collapses that killed 290 people and wreaked environmental havoc.
Since the second of those dam disasters, one of Chief Executive Officer Eduardo Bartolomeo’s mantras has been: “safety, people and repair.” The Brumadinho collapse in 2019 caused Vale to lose its position as the world’s biggest iron ore producer and sparked a companywide safety and governance overhaul.
While Vale has managed to reel in some of its valuation gap with Rio Tinto Group and BHP Group of late, the Rio de Janeiro-based producer still trades at a discount to its rivals whose Australian mines are closer to Chinese steel mills.
“It appears as though the passage of time and a relatively clean health record, plus executing on various other initiatives will be required to meaningfully move the needle”, Cosgrove said. “Mining is a tough business.”
Three days before the Sudbury incident, Vale dedicated part of an ESG briefing led by Bartolomeo to explain its health and safety agenda, including the use of innovation to reduce accidents.
Responding to the briefing, XP Investment analysts welcomed Vale’s willingness to increase transparency on its path toward ESG best practices, noting however that there are still important steps to be taken.
Realizing the significance of the Canada incident to those efforts, the CEO met with staff and rescue personnel at Sudbury where the union representing most of the trapped workers urged all involved to never forget the risk miners take every time they go underground.
(By Mariana Durao)
Comments