Brazil: Vale announces decommissioning of all its upstream tailings dams

Author: RTT News/Nasdaq (US), Published on: 30 January 2019

"Vale Announces Decommissioning Of All Its Upstream Tailings Dams", 29 January 2019

...Vale...said it would dismantle 10 dams that are similar to the one that collapsed on Friday, killing at least 84 people, after police arrested five people in connection with the disaster earlier Tuesday…[I]t has presented to the Brazilian authorities its plan to decommission all its dams built by the upstream method…[which]...aims to de-characterize these structures as tailings dams in order to reintegrate them into the environment. Vale currently has 10 dams built by the upstream method, all of which are currently inactive. All of Vale's dams present stability reports issued by external, independent and internationally respected companies. Vale estimates that investments of around R$ 5 billion will be necessary to decommission its upstream dams and estimates that the decommissioning process will occur over the next 3 years. In order to carry out the decommissioning of the upstream dams safely and quickly, Vale will temporarily halt the production of the units where the structures are located...The operation of the halted units will be resumed as the decommissioning works are completed...Vale said it expects to reallocate all its collaborators currently located in the operations that will be halted...Vale said that the Public Ministry of Labor filed a Public Civil Action and a preliminary injunction was granted, determining a freezing of R$ 800 million to secure the indemnification of direct and third-party employees that worked in the Corrego de Feijao mine at the time of the dam breach; maintenance of the wage payments to the relatives of direct and third-party employees that are still missing while the status of fatality is unconfirmed; payment of funeral expenses, transfer of body, burial of all direct and third-party employees; and, among other administrative measures. Futhermore, on January 28th, 2019, a putative securities class action complaint was filed against Vale, its CEO Fabio Schvartsman, and CFO Luciano Siani Pires, in the United States District Court for the Eastern District of New York. The complaint, putatively brought on behalf of certain purchasers of Vale securities, alleges violations of rules. The complaint alleged that the Company made false and misleading statements, and omitted to make disclosures, concerning the risks and potential damage of a breach of the dam in the Corrego de Feijaomine in Brumadinho, Brazil. The complaint seeks an unspecified amount of damages…

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