Brazilian miner Vale SA on Wednesday said it swung to a quarterly loss as the company announced more than US$2 billion in fresh write-downs related to two deadly dam bursts suffered by the company over a period of less than four years.
In late January, the collapse of a Vale tailings dam storing muddy mining waste near the town of Brumadinho killed nearly 350 people, less than four years after a deadly disaster at the company's Samarco joint venture with BHP Group .
The world's largest iron ore exporter has since been grappling with the fallout, which has forced it to shake up its board, replace its CEO and made it the target of various criminal and regulatory probes.
The company's newly installed Chief Executive Eduardo Bartolomeo said in a statement that Vale's key priority, in addition to beefing up safety efforts, was to reduce uncertainties and deliver sustainable results.
Vale said it took US$1.5 billion in write-downs for the cost of environmental measures and agreements related to the Brumadinho disaster as well as a US$257 million charge to shut down its Germano dam. It also set aside US$383 million for the Renova foundation, which is supposed to distribute funds to the victims of the Samarco disaster.
Those charges came on top of US$4.95 billion in first quarter write-downs for payments to victims and other settlements as well as a plan to shut down dams to avoid a recurrence of the disasters.
As a result, Vale reported a net loss of US$133 million after a year-ago profit of US$76 million and compared with a Refinitiv mean forecast for earnings of US$2.84 billion.
Revenue rose 6.6% from a year earlier to US$9.19 billion, shy of a forecast of US$9.59 billion, lifted by higher iron ore prices, offset by declining nickel and copper prices.
Vale shares are down 2.3% for the year to date, although they have rebounded from a sharp drop following the dam burst.
Higher iron ore prices triggered in part by Vale's woes have bolstered key global rival Anglo American , which last week reported stronger-than-forecast first half results and boosted its dividend and share buyback program. Rio Tinto Ltd is expected to report its biggest first-half profit in at least six years.
Vale reported last week that iron ore output in the quarter tumbled by more than a third because of various dam and mine shutdowns triggered by January's disaster