Brazil miner Vale knew deadly dam had heightened risk of collapse
14 February, 2019
Vale SA, the world’s largest iron ore miner, knew last year that the dam in Brazil that collapsed in January and killed at least 165 people had a heightened risk of rupturing, according to an internal document seen by Reuters on Monday.
The report, dated Oct. 3, 2018, classified the dam at Brumadinho in the state of Minas Gerais as being two times more likely to fail than the maximum level of risk tolerated under internal guidelines.
The previously unreported document is the first evidence that Vale itself was concerned about the safety of the dam. It raises questions as to why an independent audit around the same time guaranteed the dam’s stability and why the miner did not take precautions, such as moving a company canteen that was just downhill from the structure.
Vale said that the report, called “Geotechnical Risk Management Results,” comprised the views of specialist engineers, who are obliged to work within strict procedures when they identify any risks.
“There is no known report, audit or study with any mention of an imminent risk of collapse at Dam 1 in the Corrego do Feijao mine in Brumadinho,” Vale said in an emailed statement.
“To the contrary, the dam had all its certificates of safety and stability attested to by local and foreign specialists.”
U.S.-listed shares of Vale extended losses on Monday following the Reuters story, dropping as much as 2.6 percent to $11.10. The company has lost a quarter of its market capitalization — or nearly $19 billion — since the Jan. 25 dam collapse, Brazil’s most deadly mining accident.
The disaster in the mineral-rich state of Minas Gerais was the second major collapse of a mining dam in the region in about three years, following a similar disaster in 2015 at a nearby mine co-owned by Vale.
Vale’s internal October report placed the Brumadinho dam within an “attention zone,” saying that “all prevention and mitigation controls” should be applied.
A failure could cost the company $1.5 billion and had the potential to kill more than a hundred people, the report said. The dam was marked for decommissioning.
Nine other dams in Brazil, out of 57 that were studied, were also placed in the “attention zone,” according to the report.
A separate Vale report dated Nov. 15, 2017, also seen by Reuters, states that any structure with an annual chance of failure above 1 in 10,000 should be brought to the attention of the chief executive and the board.
The dam’s annual chance of collapse was registered as 1 in 5,000, or twice the tolerable “maximum level of individual risk,” according to the report.
“That’s not good in my book, especially if you consider that these are meant to be long-term structures,” said David Chambers, a geophysicist at the Center for Science in Public Participation and a specialist in tailings dams.
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