A group of investors in Brazil’s Vale (NYSE:VALE), the world’s top iron ore producer, is seeking compensation for loses linked to the deadly dam burst in Brumadinho in January this year, which killed more than 300 people and also caused extensive property and environmental damage in the region.
The group, made up of about 25 asset management firms and some pension funds, argues that the Vale did not disclose information about risks facing the dam in the state of Minas Gerais to the market, even though it was aware of it, local newspaper Valor Economico reported on Wednesday.
They want to be compensated for losses resulting from Vale’s falling share price following the tailings dam disaster.
They claim that, due to the lack of
transparency as well as measures taken by from the government and prosecutors,
the company’s shares have lost almost 30% of their value ever since.
The news comes on the heels of Vale’s announcement of a $107-million compensation (400 million Brazilian real) to workers impacted by the rupture of the dam as it Córrego do Feijão mine.
Last month, Vale said that it had so
far paid emergency compensation to around 100,000 residents of the municipality
and region where the mine is located.
It also announced that it plans to
spend R$1.8 billion ($471 million) by 2023 in several projects to stabilize
remaining structures at Córrego do Feijão. Other programs include reducing
tailings flow into the Paraopeba river, ensuring proper disposal of tailings
and rebuilding public facilities. They are expected to generate around 2,500
jobs.