Vale Faces Spiralling Losses After Brazil Dam Collapse
January 28 2019 - 5:22AM
Dow Jones News
By Samantha Pearson
SÃO PAULO -- Vale SA said Monday it had suspended dividend
payments and share buybacks as the miner faces spiraling losses
over its dam that burst leaving hundreds of people missing and
presumed dead in southeast Brazil.
The iron ore miner also froze executive bonuses and created
independent committees to help victims and investigate the cause of
what is shaping up to be the world's most deadly mining disaster in
over 50 years.
The death toll had risen to 58 by Sunday night, but rescue
workers were losing hope Monday of finding another 300 or so people
alive who were buried under thick mud when the Vale-owned dam burst
Friday.
The dam's collapse in Minas Gerais state has sparked outrage
across Brazil, especially as it comes only three years after
another dam part-owned by Vale also burst nearby, killing 19 people
and causing widespread environmental damage.
Judges have already frozen about $3 billion in total of the
company's assets, in response to Friday's disaster, to fund relief
efforts and structural work to shore up the dam, Vale said in a
statement.
Brazil's environmental agency IBAMA has also fined Vale $66
million, while the state of Minas Gerais has ordered the miner to
pay $26 million as a penalty for the breach.
Rating agency Standard & Poor's warned Saturday that it
could cut Vale's BBB-rating by several notches as a result of the
disaster, citing concerns over fines and the possibility that the
company could be stripped of some operating licenses.
Write to Samantha Pearson at samantha.pearson@wsj.com
(END) Dow Jones Newswires
January 28, 2019 05:07 ET (10:07 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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