February 27, 2019 / 9:53 PM / 3 months ago

UPDATE 1-Brazil judge orders Vale workers out of jail; miner's credit rating cut

(New throughout, adds judge orders workers’ release, updates share price, adds details about legislation)

By Jake Spring

BRASILIA, Feb 27 (Reuters) - A Brazilian judge on Wednesday ordered the release from jail of several Vale SA workers arrested last month in a criminal investigation of a deadly mine accident, saying there was no risk they would flee or destroy evidence.

Separately, Vale’s debt was downgraded by Moody’s Investors Service, which sent its shares tumbling 1.6 percent. The stock bounced off session lows after the eight workers were released.

The miner has been under intense scrutiny after a tailings dam ruptured at its Corrego do Feijao iron ore mine in the state of Minas Gerais on Jan. 25, releasing a torrent of sludge that killed an estimated 300 people.

The company and its workers are under investigation for criminal responsibility for the dam rupturing, in the form of hundreds of “qualified homicides.” Vale has said its risk management complied with all laws and regulations.

Appeals court judge Nefi Cordeiro ordered the release of eight Vale workers who had been jailed since Feb. 15. News of the ruling was first reported by website G1.

Earlier, Moody’s cut Vale’s debt rating by one notch to Ba1 with a negative outlook, taking it out of investment grade range due to rising risks after the disaster.

Vale had announced it would take up to 10 percent of its output offline while it decommissioned all dams built with the same technique as the one at the Corrego do Feijao mine.

Separately on Wednesday, Brazilian Senate committees approved a bill to tighten dam safety following the disaster.

The raft of measures would require costly improvements to mines and also add new requirements for monitoring technology, insurance and continued mining tax payments in the event of disaster-related shutdown. (Reporting by Jake Spring; editing by Christian Plumb and David Gregorio)

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