A judge in the Brazilian state of Minas Gerais has partially
granted an injunction sought by prosecutors by ordering Vale (NYSE: VALE) to
set aside 7.9 billion reais (about $1.5 billion) to pay potential fines
related to the tailings dam collapse that killed 270 people last year.
The figure adds to the 1 billion reais ($260m at the
time) frozen funds a
federal court ordered Vale to pay affected communities shortly after
the deadly incident.
About $48 million reais ($10.4 million) were released
to the company in March to fund a probe into the causes of the dam
collapse.
The town of Brumadinho, where Vale’s Córrego do Feijão iron
ore mine is located, suspended
this month Vale’s licence to operate on concerns workers were not
respecting social distancing rules.
It also halted ongoing
work to repair the mine’s tailings storage facility.
The iron ore giant faces multiple legal actions over the
incident, the deadliest in Brazil’s mining history. They include allegations
that Vale was aware
of the dam’s unstable condition years before the accident happened.
In January, state prosecutors charged Fabio Schvartsman, the
chief executive at the time of the burst, and 15 other people with homicide. Schvartsman left his
position at the company in March 2019.
They also charged Vale and its German contractor, TUV SUD,
with environmental crimes, as the burst unleashed an avalanche of muddy mining
waste that polluted the nearby town of Brumadinho, water streams and
agricultural land.
Tailings in the spotlight
The tragic incident has triggered over the past year several
criminal investigations, including a global inquiry into the status of 726 tailing dams.
It has also put the safety of those structures under the
microscope.
The International Council on Mining and Metals (ICMM),
a London-based industry group representing 27 major mining companies,
formed an independent panel of experts in charge of
developing global standards for tailings facilities.
The Church of England, which invests in mining companies
through its pensions for retired clergy, along with its partners, launched a global inquiry in April 2019 into the
mining waste storage systems of more than 700 resources companies.
It now asks companies to disclose data on tailings dams on a
regular basis.
Switzerland-based Responsible Mining
Foundation (RMF) published a study in early April this year, showing
that investor-led action had resulted in improved transparency regarding the
state of such facilities.
The vast majority of miners, however, have yet to
demonstrate they are reviewing how they effectively manage tailings-related
risks.
The non-profit, funded by the Dutch and Swiss governments
and some small philanthropic organizations, said that while a global
standard on tailings management is a welcome initiative, it could be
significantly strengthened to become significant in terms of tailings safety.