Brazil’s Vale Agrees to US$7 Billion Brumadinho Disaster Settlement
RIO DE JANEIRO, BRAZIL – Brazilian mining giant Vale S.A. said on Thursday, February 4th, that it reached a R$37.7 billion (US$7 billion) agreement with prosecutors and the state of Minas Gerais to settle claims stemming from the 2019 collapse of a tailings dam that killed 270 people.
In a securities filing, Vale said it will book an additional R$19.8 billion related to the agreement this year.
Investors cheered the agreement: Vale shares, suspended for the announcement, reopening up 2.3%.
On expectation of the settlement shares had risen 1.7% before the news, adding to a 3% jump on Wednesday as information about the agreement began to emerge.
The disaster, Brazil’s most deadly mining tragedy, has hampered Vale’s performance over the past two years as it was forced to curb production amid new safety protocols.
On Wednesday, Vale reported lackluster annual production figures, but flagged a potential rebound in both output and sales in 2021.
Vale said it closed 2020 with 322 million tons of annual iron ore production capacity, and it expects that number to rise to 350 million tons by the end of 2021.
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