Report claims Vale was aware of risk at failed dam

February 12, 2019

The confirmed death toll from the collapse of Vale’s Minas Gerais dam in Brumandinho, Brazil climbed past 165 with many more still missing. In the wake of the disaster, Reuters reported that it has seen an internal report that warned the company that there was a heightened risk of failure of the dam and that Vale was aware the Minas Gerais dam breached internal safety guidelines in October.

Vale, the world's top iron ore miner, said the report was misleading as there was no evidence of imminent risk.

Vale previously said the dam was ruled safe by an independent auditor.

"There is no known report, audit or study with any mention of an imminent risk of collapse at Dam 1 in the Córrego do Feijão mine in Brumadinho," the company said in a statement.

"To the contrary, the dam had all its certificates of safety and stability attested to by local and foreign specialists."

According to the internal report seen by Reuters, Vale was told the chance of collapse at Brumadinho was one in 5,000 - twice the maximum level of risk allowed under company guidelines.

The report placed the dam within an “attention zone,” saying that “prevention and mitigation controls” should be applied.

It also said a failure could cost the company $1.5bn (£1.2bn) and lead to more than 100 deaths. Furthermore it flagged nine other Vale-owned mining dams in Brazil as being at risk.

Vale acknowledged the existence of the report, but said the causes of the collapse were still being investigated.

It has previously said an audit by German firm TÜV SÜD, carried out in September last year, found the dam met legal requirements.

However, this audit report, also seen by Reuters, raised a number of concerns, particularly about the dam's drainage and monitoring systems.

It made 17 recommendations to improve safety, all of which Vale said have been implemented.

It is still not known what caused the collapse at Brumadinho, but experts believe liquefaction was to blame.

Liquefaction is a process whereby a solid material such as sand loses strength and behaves more like a liquid.

Shares in Vale extended their losses in New York on Monday following publication of Reuters' story. The company has lost a quarter of its market value - or nearly $19 billion - since the 25 January disaster.

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