The deadly dam disaster involving Vale will have a profound impact on the world’s largest iron-ore producer, not only in terms of serious reputational risk, but it could strain the company’s liquidity and its ability to meet financial requirements, Moody’s Investor Service said this week.
The Brazilian major has a “good” liquidity profile with $6.1-billion in cash and $5-billion committed in credit facilities fully available, but Moody’s warned that the potential liabilities and sanctions against Vale and its executives could have a negative impact on liquidity.