Vale expected to keep digging out of Brumadinho hole
The Brumadinho tragedy, which completes one year on January 25, remains Vale's number one priority, and in 2020 the mining company will continue focusing its efforts on repairing and compensating for the disaster, which killed 270, 11 of which remain unaccounted for. The collapse, in addition to the socioeconomic impact left in Minas Gerais, negatively affected the mining company's stock, which has appreciated far less than competitors Rio Tinto and BHP Billiton in 2019. In dollars, Vale's share price in New York gained 2.72% last year. BHP's stock climbed 24.5%, while Rio Tinto's stock appreciated 37.52%.
In December, at meetings with investors in New York and London, the company's management, led by Eduardo Bartolomeo, conveyed the message that the company's goal is to reduce the lingering risk surrounding it after the Córrego de Feijão mine dam's collapse. Market uncertainties include fears that the company will not make the necessary reparations and there may still be safety risks, and that part of its iron ore production will never return.
From this complex scenario, Valor presents an analysis of seven challenges the mining company will face this year. Mr. Bartolomeo has already acknowledged that Vale needs to rethink how it relates locally to communities and has to do so by defining important actions for society in the environmental and social areas. Following are the main points to be faced by Vale in 2020.
Brumadinho agreements
Since the disaster of that Friday, 25 January 2019, until December, Vale signed 25 agreements. Compensation payments and expenses totaled $1.6 billion in 2019. At the end of last year, the company approved extending emergency compensation payments for another 10 months in Brumadinho to 108,000 people, which will represent additional spending of R$550 million. In the market, the mining company is expected to reach a final agreement with authorities in Minas Gerais later this year on aspects contained in two public civil actions (ACPs) filed against Vale: one has a socioeconomic nature and the other is environmental. They total about R$11 billion in claims against the company. So far, analysts say, Vale has made individual agreements that include reparations and indemnities. But there are other aspects in the ACPs linked, for example, to compensation (collective harm) that still need to be addressed. In a statement, Vale said it had discussions with authorities, including the Minas Gerais Prosecution Service...
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