MercoPress. South Atlantic News Agency

Brazil's Vale ordered to suspend more iron ore operations fearing dam breaks

Mining giant Vale said the ANM’s decision was made in light of a possible failure of five dams at both complexes, which are located in Minas Gerais

Brazil's mining agency (ANM) has ordered Vale to suspend operations at its Fabrica and Vargem Grande complexes, as part of an ongoing crackdown following last month's deadly dam break at the iron producer’s Corrego do Feijão mine.

Vargem Grande complex, which accounts for around 13 million tons of iron ore per year, had been shut since early February. The Rio de Janeiro-based company said the ANM’s decision was made in light of a possible failure of five dams at both complexes, which are located in Minas Gerais, the same state where the Feijão mine dam collapse last month likely killed over 300 people.

Since last month's dam collapse, the second such accident involving Vale in about three years, both authorities and companies have stepped up scrutiny of so-called upstream dams, the cheapest but generally regarded as the riskiest method to store mine waste.

While Vale said it was abiding by the regulator's decision, it has asked the agency for permission to dismantle the dams, while continuing some operations to limit impacts on production.

The Vargem Grande complex, which accounts for around 13 million tons of iron ore per year, had been shut since early February, as part of Vale's previously announced plans to curb 40 million tons of output.

In a separate statement, Vale said it would pay adult residents in Brumadinho, the Brazilian town affected by the Feijão dam collapse, a total of 12,000 reais (US$ 3,227.02) each as compensation for the damage. The sum is roughly equivalent to 12 monthly minimum wages in Brazil.

The world's biggest iron ore miner also committed to pay half that amount for every teenager and 25% for every child, but didn’t specify when those payments would begin.

Earlier this week Brazil banned new upstream mining dams and ordered the decommissioning of upstream waste dams by August 15, 2021.