Brazilian mining giant Vale SA has slashed spending on waste storage even after a catastrophic dam failure at its Samarco joint venture with BHP Billiton last November killed 19 people and triggered tens of billions of dollars in lawsuits.
Vale, the world’s largest producer of iron ore and nickel, reduced maintenance capital expenditures on waste dumps and tailings dams by 51 per cent in the first nine months of 2016 from the year-ago period to $US86.7 million, according to its financial statements. That followed similarly large cuts in 2014 and 2015 as Vale doubled down on belt-tightening measures in a bid to shore up cash reserves and pay down debt amid the commodity downturn.
In an emailed statement, Vale said its 2014 spending was elevated in part by the construction of a large tailings dam at its Brucutu mine in Brazil, while subsequent investment in new dams was slowed by licensing delays. Vale also said it has been shifting to high-grade ore that can be processed without water and therefore doesn’t require tailings dams, though it uses this method for only 40 per cent of iron-ore output at present.
A Vale spokeswoman added that maintenance spending on existing tailings dams hasn’t been reduced since 2013. Inadequate maintenance of mining waste can be disastrous.
The November 5, 2015 collapse of Samarco’s Fundão tailings dam in southeast Brazil released at least 32 million cubic metres of mine detritus — enough to fill the Dallas Cowboys’ AT & T Stadium 11 times — which destroyed villages and polluted hundreds of kilometres of rivers before spewing into the Atlantic Ocean.
Vale and joint-venture partner BHP Billiton are defendants alongside Samarco in a nearly $US50 billion environmental lawsuit filed by Brazilian prosecutors as a result of the damage.
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