Brazilian authorities will lay criminal charges against iron ore giant Vale (NYSE: VALE), 13 of its employees and German auditor TÜV SÜD, accusing them of fraud in relation to a deadly dam burst at the company’s Córrego do Feijão mine in January.
Federal police said the companies presented fake documents backing the stability of the dam whose collapse killed nearly 250 people and unleashed a gush of mining waste on a nearby towns.
Federal police said the companies presented fake documents backing the stability of the dam that collapsed in January.
Penalties for these kinds of crimes can be of up to 18 years in jail.
The Rio de Janeiro-based company reacted to the news by saying it was “aware of the police investigation,” but wouldn’t comment further until it analyzes “the full content of the report.”
Police also said it didn’t rule out the possibility of charging executives from both Vale TÜV SÜD with homicide and environmental damage in coming days, local O Globo reported.
Seven people from Vale and six from Tüv Süd are being indicted, according to the paper.
The world’s top iron ore producer is also facing a lawsuit by a group of investors who argue that 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,
Earlier this year, Vale’s announced a $107-million compensation (400 million Brazilian
real) to workers impacted by the rupture of the dam and said would spend
R$1.8 billion ($471 million) by 2023 on several projects to stabilize remaining
structures at the Córrego do Feijão mine.
Other programs include reducing
tailings flow into the Paraopeba river and ensuring proper disposal of tailings
and rebuilding public facilities. The projects are expected to generate around
2,500 jobs.