Vale seeks more time to remove upstream tailing dams

The Brazilian miner told regulatory bodies it was "technically impossible" for it to meet Minas Gerais' current Feb. 25 deadline.

Vale (NYSE: VALE) is asking regulatory bodies in Brazil to extend a deadline for removing 23 upstream tailing dams located in the state of Minas Gerais due to a “technical impossibility” to meet the current February 25 deadline.

Upstream dams are the type of the structures that failed in Mariana in 2015, and Brumadinho in 2019. The first disaster killed 19 people and the second accident left 270 people dead.

Vale, which owns most dams related to iron ore production in Minas Gerais, has eliminated four upstream dams in the state since 2019 and another three in Pará state, where a total of 30 belong to the company.

The Rio de Janeiro-based miner said it remains committed to the removal of all its upstream tailing dams, adding that it expects to have eliminated 40% of them by the end of the year and 90% by 2029.

Full decommissioning, however, won’t be reached before 2035, it said in a statement quoted by local media.

The iron ore producer said last month it plans to spend about 9 billion reais ($1.65 billion) this year on reparations related to the Brumadinho dam burst.

Three years, almost $4bn later

Since 2019, the company said it has spent some 18 billion reais (about $3.6bn) in reparations and compensation for social and environmental damage.

In addition, nearly 12,000 people have entered into civil and labor compensation agreements with Vale, resulting in the payment of more than 2.6 billion reais.

Last year, the mining company signed a full reparation agreement with the government of Minas Gerais, the state and federal public prosecutors and the public defender’s office that governs ongoing actions, and which ended collective legal actions. The individual agreements, on the other hand, are being carried out separately.

In January 2020, state prosecutors charged Fabio Schvartsman, the former chief executive of the miner, and 15 other people with homicide for the dam disaster. A court later ruled the case should proceed through federal rather than state court.

There are other upstream dams in the state owned by companies like CSN, Gerdau and ArcelorMittal, according to records of the National Mining Agency (ANM) and the Minas Gerais government.

This type of tailings has long been banned in earthquake-prone mining countries such as Chile and Peru because they are susceptible to damage and cracks. This makes them nearly twice as unstable as the average mining waste facility, studies have shown.

While Brazil is not as earthquake-prone a nation as its western neighbours, it’s been shown that even small seismic activity can affect tailings dams such as the one near Brumadinho.

(With files from Reuters)