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Brazilian government considering management overhaul at miner Vale SA

Tuesday, January 29th 2019 - 08:43 UTC
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Shares of Vale, the world’s largest iron ore and nickel producer, plummeted as much as 25% in Monday trading on the Sao Paulo stock exchange. Shares of Vale, the world’s largest iron ore and nickel producer, plummeted as much as 25% in Monday trading on the Sao Paulo stock exchange.
Brazil’s acting president Hamilton Mourao said a government task force on the disaster response is looking at whether it should change Vale’s top management Brazil’s acting president Hamilton Mourao said a government task force on the disaster response is looking at whether it should change Vale’s top management

Brazil’s government weighed pushing for a management overhaul at miner Vale SA on Monday as grief over hundreds feared killed by a dam burst turned into anger, with prosecutors, politicians and victims’ families calling for punishment. By Monday, firefighters in the state of Minas Gerais had confirmed 65 people killed by Friday’s disaster, in which a burst tailings dam sent a torrent of sludge into the miner’s offices and the town of Brumadinho.

Nearly 300 more people are unaccounted for, and officials said it was unlikely that any would be found alive.

Brazil’s acting president Hamilton Mourao told reporters a government task force on the disaster response is looking at whether it could or should change Vale’s top management. Public-sector pension funds hold several seats on the miner’s board.

“The question of Vale’s management is being studied by the crisis group,” said Mourao, who is serving as acting president for some 48 hours while President Jair Bolsonaro recovers from surgery.

“I’m not sure if the group could make that recommendation.”

Shares of Vale, the world’s largest iron ore and nickel producer, plummeted as much as 25% in Monday trading on the Sao Paulo stock exchange.

Senator Renan Calheiros, who is in the thick of a Senate leadership race, called on Twitter for Vale’s top management to be removed urgently “out of respect for the victims ... and to avoid any destruction of evidence.”

One of Vale’s lawyers, Sergio Bermudes, told newspaper Folha de S. Paulo that management should not leave the company and Calheiros was trying to profit politically from the tragedy.

The disaster at the Corrego do Feijao mine occurred less than four years after a dam collapsed at a nearby mine run by Samarco Mineracao SA, a joint venture by Vale and BHP Billiton, killing 19 and dumping toxic sludge in a major river.

While the 2015 Samarco disaster unleashed about five times more mining waste, Friday’s dam break was far deadlier as the wall of mud hit Vale’s local offices, including a crowded cafeteria, and tore through a populated area downhill.

Environment Minister Ricardo Salles said in a TV interview on Monday that Brazil should create new regulation for mining dams, replacing wet tailings dams with dry mining methods.

Mines and Energy Minister Bento Albuquerque proposed in Sunday newspaper interview that the law should be changed to assign responsibility in cases such as Brumadinho to the people responsible for certifying the safety of mining dams.

“Current law does not prevent disasters like the one we saw on Brumadinho”, he said. “The model for verifying the state of mining dams will have to be reconsidered. The model isn’t good.”

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