Brazil’s Vale licenses to operate Laranjeiras dam, Jangada mine canceled

SAO PAULO (Reuters) – Brazilian miner Vale SA said on Wednesday the state of Minas Gerais has canceled the licenses to operate the Jangada iron ore mine and the Laranjeiras dam.

A view of the Brazilian mining company Vale SA collapsed, in Brumadinho, Brazil February 1, 2019. REUTERS/Adriano Machado/File Photo

Jangada has been paralyzed since the dam close to the Córrego do Feijão mine burst in the state, likely killing more than 300 people.

The Laranjeiras dam was used in the operation of the Brucutu mine, which has been suspended by a separate court decision, freezing nearly 9 percent of the company’s output. Vale said it would appeal the license cancellation.

The cut in output forced Vale to declare force majeure in iron ore and pellets contracts on Tuesday.

On Tuesday the miner said in a filing it will invest some 1.5 billion reais ($400 million) starting in 2020 to reduce its reliance on tailings dams, after the collapse last month.

The dam at the Córrego do Feijão mine burst on Jan. 25 in the town of Brumadinho, in what is possibly Brazil’s most deadly mining disaster. Rescuers said Wednesday they had found 150 bodies, and 182 people were still missing.

Vale said its plan to reduce its reliance on giant dams to store the muddy detritus from mining, known as tailings, would boost the portion of the leftover material that is dried rather than stored wet to 70 percent by 2023.

The company said it would spend about $70 million on safety and maintenance at existing tailings dams in 2019, representing a 180-percent jump from 2015. That year, a Vale joint venture was responsible for another deadly dam spill that killed 19 people and polluted a major river.

In December, Vale agreed to pay $500 million for New Steel, a company that owns patents in 56 countries for a dry processing method known as Fines Dry Magnetic Separation.

In 2009, one Vale executive identified concerns about the tailings dams and discussed the possibility of making building material from tailings, including bricks, in a bid to trim the vast amounts of wet tailings, Reuters reported last week. It was not clear whether the company followed any of his recommendations at the time.

Vale has come under intense public pressure since the Jan. 25 dam burst, with some politicians and prosecutors calling for criminal prosecution and a management shakeup.

Reporting by Ana Mano and Christian Plumb; editing by Jeffrey Benkoe and Bernadette Baum

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