Skip to content

Vale implicated in another dam collapse in Brazil with more than 300 casualties feared

Dam break in Brumadinho | Bild: TV NBR [CC BY 3.0] - Wikimedia Commons

On Friday the 25th of January, a tailings dam at the Córrego de Feijão mine in Brumadinho, Brazil suffered a cave-in, resulting in a toxic landslide causing more than 99 casualties, with still 259 missing. The mudslide engulfed a nearby canteen in which workers of the mine had been eating lunch before progressing to nearby houses.1
This is not the first dam collapse to happen in Minas Gerais. Just three years ago, on the 5th of November 2015, a waste dam of an iron ore mine operated by Samarco had collapsed. The mine was a joint venture of Vale and BHP Billiton. Located just north of Mariana, it had killed 19 people, destroyed 349 houses and contaminated 2,200 hectares of land as well as 650 kilometres of river. The dam in Brumadinho held a volume of 13 million cubic metres of ore sludge compared to 50 million cubic metres spilled by the Samarco dam failure. Yet Brumadinho had devastating impacts, causing vast pollution as well as a much higher death toll as a result of the dam breakage. According to Mark Macklin, who has studied tailings dam disasters and is a professor of physical geography at the University of Lincoln, the mud irritates the eyes and throat, due to the high pH levels in iron ore mining waste.2 The fish in the rivers suffer from a lack of oxygen caused by the high sediment loads in the water, causing many to die. 3 As the 2015 dam collapse continues to affect the environment and people’s lives, similar damage to the environment in Brumadinho is expected. 3

Who is responsible?
The cause of the dam burst remains unknown, as it had been approved by TÜV Süd as recently as September 2018, stating: “according to our current state of knowledge, no defects were found”. Vale said in an official statement: „The dam had a safety standard in accordance with the worldwide Good-Practice-Criteria and was above the usual Brazilian standard. Both mentioned stability declarations (those of TÜV Süd, d. Red.) attested the physical and hydraulic safety of the dam.”
Sirens sounded to alert the residents of Braumadinho of the evacuation on Sunday, however the residents reported an absence of sirens ahead of the torrent on Friday. 4 Without a doubt, the failure to keep alarm sirens working5 on site to warn inhabitants and workers contributed to the large death toll. It has been reported that mining companies have cut the funding in the areas of safety and maintenance due to the sinking prices of raw materials. Five people have been arrested as part of an investigation into the recent dam collapse, three of which were officials from Vale compliant with the issuing of environmental impact licences.6

Hope for the future remains limited, perhaps even non-existent after Brazil’s new president Bolsonaro declared in his presidential campaign that environmental regulations are holding back the advancement of the country and therefore he advocated for the easing of regulations on mining.7
Allianz is leading a consortium that reinsures Vale against liability claims, meaning the Munich-based insurer is involved in the damages imposed on Brumadinho. However, sources from the industry have claimed that environmental damages would not be covered under the contract. Vale has insurance against damage to its own facilities and business interruptions, called insurance against so-called “lost profits”. This model had also been adopted by Samarco, whose 2015 dam collapse caused damage to third parties and the environment amounting to several billion euros. The largest part of this loss has not yet been paid, however Samarco itself received up to two billion reais for lost profits (the equivalent of around 500 million euros), from Allianz, Münchener Rück and Hannover Rück. 8 Vale’s incoherency regarding safety measures and the resulting tragedy has resulted in its shares falling by more than 20% on the Sao Paulo stock exchange since the incident.
Facing Finance together with Misereor and Brazilian partners affected by the 2015 tailings spill in Mariana have engaged with Deutsche Bank in 2018 to push for improvements at Vale or divest. However, recent information shows that Deutsche Bank as well as UnionInvestment, Deka and Allianz Global Investors still hold shares of the mining company. As the recently published Dirty Profits 6 report shows, major European banks have continued funding Vale even after the 2015 disaster, among these HSBC, BNP Paribas, Crédit Agricole, ING and Deutsche Bank.

  1. []
  2. []
  3. [] []
  4. []
  5. []
  6. []
  7. []
  8. []