February 6, 2019 / 2:12 PM / 13 days ago

Vale to invest $400 mln to reduce need for tailings dams

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By Ana Mano and Christian Plumb

SAO PAULO, Feb 6 (Reuters) - Vale SA, the world’s largest iron ore miner, plans to invest some 1.5 billion reais ($400 million) starting in 2020 to reduce its reliance on tailings dams, it said late on Tuesday, after one collapsed last month, likely killing hundreds.

The dam at the Feijao do Corrego mine burst on Jan. 25 in the Brazilian town of Brumadinho in what is likely the country’s most deadly mining disaster ever. Rescuers have found 142 bodies and almost 200 people are 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 to 70 percent by 2023 the portion of the leftover material that is dried out rather than stored wet.

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

A Vale spokeswoman said that both the 2019 investment in dam management and the plan to produce more dry tailings had already been budgeted before the Brumadinho disaster but not made public.

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, as one measure to reduce the hundreds of thousands of tonnes of wet tailings, Reuters reported last week. Whether the company followed any of his recommendations at the time is unclear.

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.

A court-ordered halt to production at several of its dams on Monday froze production at its largest mine in Brazil’s mining heartland of Minas Gerais, responsible for nearly 9 percent of the company’s output.

That led Vale to declare a force majeure on some of its iron ore contracts on Tuesday.

$1 = 3.6917 reais Reporting by Ana Mano and Christian Plumb; Editing by Jeffrey Benkoe and Steve Orlofsky

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