Vale 'knew collapsed dam was at risk', says report

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At least 34 have been confirmed dead and some 300 remain missing after a dam burst in Brazil, 26 January 2019Image source, EPA
Image caption,
The sea of muddy sludge swept over roads and destroyed buildings

The owner of a mining dam that collapsed in Brazil last month, killing 165, knew it was at a heightened risk of failure, Reuters claims in a report.

According to an internal report seen by the news agency, Vale was aware the Minas Gerais dam breached internal safety guidelines in October.

Vale, the world's top iron ore miner, said the report was misleading as there was no evidence of imminent risk.

Vale previously said the dam was ruled safe by an independent auditor.

"There is no known report, audit or study with any mention of an imminent risk of collapse at Dam 1 in the Córrego do Feijão mine in Brumadinho," it said in a statement.

"To the contrary, the dam had all its certificates of safety and stability attested to by local and foreign specialists."

The incident at Brumadinho dam is Brazil's deadliest mining disaster, with many workers still unaccounted for and with some 300 people feared dead.

It was the second major mining disaster in the region since 2015, when a nearby dam co-owned by Vale collapsed.

According to the internal report seen by Reuters, Vale was told the chance of collapse at Brumadinho was one in 5,000 - twice the maximum level of risk allowed under company guidelines.

The report placed the dam within an "attention zone", saying that "prevention and mitigation controls" should be applied.

It also said a failure could cost the company $1.5bn (£1.2bn) and lead to more than 100 deaths. Furthermore it flagged nine other Vale-owned mining dams in Brazil as being at risk.

Monitoring concerns

Vale acknowledged the existence of the report, but said the causes of the collapse were still being investigated.

It has previously said an audit by German firm TÜV SÜD, carried out in September last year, found the dam met legal requirements.

However, this audit report, also seen by Reuters, raised a number of concerns, particularly about the dam's drainage and monitoring systems.

It made 17 recommendations to improve safety, all of which Vale said have been implemented.

It is still not known what caused the collapse at Brumadinho, but experts believe liquefaction was to blame.

Liquefaction is a process whereby a solid material such as sand loses strength and behaves more like a liquid.

Shares in Vale extended their losses in New York on Monday following publication of Reuters' story.

The company has lost a quarter of its market value - or nearly $19bn - since the 25 January disaster.