November 5, 2019 / 5:48 PM / a month ago

Brazil regulator says Vale 'negligence' may have cost lives

BRASILIA/SAO PAULO (Reuters) - Brazil’s mining regulator on Tuesday blasted iron ore miner Vale SA (VALE3.SA) for failing to disclose problems with a mining dam before a deadly collapse in January, saying this kept the agency from taking actions that could have saved lives.

FILE PHOTO: A view of Brazilian mining company Vale's collapsed tailings dam in Brumadinho, Brazil, Feb. 13, 2019. REUTERS/Washington Alves

The dam in Brumadinho collapsed and flooded a nearby company cafeteria and the surrounding countryside with mining waste, killing more than 250 people. It was Vale’s second deadly dam collapse in less than four years.

The regulator’s report on its probe into the disaster is the latest blow to the reputation of Vale, which is under criminal investigation over accusations that top executives ignored warning signs about the dam.

Based on the report’s findings, ANM will now assess the iron ore miner with 24 new fines. Officials said that the amount of each fine is capped at around 6,000 reais ($1,500) under Brazilian law.

The report detailed several problems that it said Vale should have reported.

The first occurred in June 2018, seven months before the disaster, when the company installed horizontal drainage pipes and discovered sediment in the drainage water. This worrying sign should have been reported immediately, ANM officials told reporters in a briefing.

“The serious fact is that when there is sediment it must be reported. Period. It wasn’t. If it had been communicated, the area would immediately have been submitted to daily inspections,” said ANM head Victor Bicca.

“But we didn’t know what was happening.”

Vale said in a statement it would analyze the report but it was unable to comment on technical decisions taken by its “geotechnical team” at the time.

The miner said it is providing all information on the history of the dam’s condition to authorities, adding that various investigations were pending into the cause of the dam burst.

Several ANM directors said if Vale had properly reported drainage, water pressure and other issues at the dam, it would have been classified as “emergency level 1”, bringing a higher level of scrutiny including daily inspections.

They said those inspections could have uncovered further problems, ultimately leading to evacuation, which would have saved lives.

Because problems were not disclosed, the dam was not given high priority, since it was not actively receiving more mining waste, director Tasso Mendonca said. He said the dam was “a bit forgotten.”

“It’s a kind of negligence, perhaps not intentional,” he said.

Reporting By Jake Spring in Brasilia and Christian Plumb and Roberto Samora in Sao Paulo; Editing by David Gregorio

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