Vale Quarterly Earnings Report Projects US$ 4.8 billion in Losses from Brumadinho Disaster

Expenses and money set aside after the mining dam collapse led company to incur US$ 1.62 billion in financial damages

Nicola Pamplona
Rio de Janeiro

In its first-quarter earnings report, Vale projects R$19 billion ($4.8 billion) in losses related to the Brumadinho disaster. The mining company closed the first quarter with R$6.4 million (1.62 billion) in financial damages. At the same time last year the company had accrued R$5.1 billion ($1.3 billion) in profits. 

The tragedy occurred on January 25 and left a trail of destruction in the region. Authorities say 237 people died and there are still 33 people missing. Restrictions on operating mining dams in Brazil have increased since then. 

The tragedy occurred on January 25 and left a trail of destruction in the region. Authorities say 237 people died and there are still 33 people missing. - Cristiane Mattos / O Tempo

In its quarterly earnings, Vale budgeted R$9.3 billion ($2.35 billion) for victim compensation and environmental cleanup. The company allocated another R$ 7.1 billion ($1.8 billion) toward taking down dams and R$ 2.5  billion ($.63 billion) for city work, physical losses and work stoppage related to the disaster. 

The company said that at this stage in the investigation, it is not yet possible to precisely determine what the total cost of the disaster will be with compensation, reparations, and potential lawsuits. 

After the tragedy, the government blocked Vale’s cash, so it needed to raise funds. Thus, the company’s gross debt rose 10 percent to $17 billion (about R$67 billion) 

Production cuts following the accident also affected quarterly results. Authorities closed mines with similar dams to the one that broke in Brumadinho leading iron ore production to fall 30%, and pellet production to fall 20%. 

Translated by Kiratiana Freelon

Read the article in the original language