The disaster at the Córrego do Feijão iron ore mine in southeastern Brazil has left Vale reeling from its second 2019 quarterly loss in a row
The aftermath following January's dam disaster in Brumadinho, Brazil (Credit: Wikimedia)
Brazilian mining conglomerate Vale has recorded a second consecutive quarterly loss in 2019, seven months after the dam disaster at its mine in Brumadinho that killed more than 240 people in January.
The world’s largest iron ore exporter, headquartered in Rio de Janeiro, suffered a $133m hit in the second quarter of this year, a far cry from its $76m profit this time last year, and salt in the wound following a $1.6bn loss for 2019’s first quarter.
Eduardo Bartolomeo, Vale’s recently-appointed chief executive, said: “As we progress towards full and effective reparation, 2Q19 has been a transitional quarter for the business, with the Brumadinho dam rupture still impacting volumes, costs and expenses.
“However our response started to bear fruit to ensure the safety of people and of the company’s operations, as well as to reduce uncertainties and to deliver sustainable results through the supply of a high-quality product portfolio, which will already be reflected in the next quarter.”
Vale quarterly loss a result of Brumadinho dam disaster
Vale has blamed the accident at its Córrego do Feijão iron ore mine in southeastern Brazil, which involved the collapse of a dam and subsequent wave of sludge that consumed everything within a 5km radius, for the poor numbers.
It is widely regarded as the worst disaster in the company’s 76-year history and has led to the partial or total shut down of several of its other facilities while investigations are carried out.
Last month, congressional authorities from Brazil recommended that 12 former and and current executives from the miner be indicted for their alleged part in the event, adding further pressure to the federal prosecutors assessing Vale’s potential liability.
The company is optimistic it will head back towards profit over the remainder of 2019, with its largest mine, the Brucutu facility located in the state of Minas Gerais, having recently come back online and brought with it some 30m tonnes of yearly iron ore capacity.
A further 30m tonnes of capacity is reportedly due to be restored before the year is out, with Vale expecting its iron ore and pellets sales to reach up to 332m tonnes by December.