SAO PAULO (Reuters) – When Fabio Schvartsman took the reins of Vale SA in 2017, he suggested a motto for the world’s largest iron miner, turning the page on a tailings dam disaster that hit a small Brazilian town two years before: “Mariana, never again.”
That and many of Schvartsman’s other big promises look destined for the scrap heap. Four years later and some 100 km (60 miles) from Mariana, a breached Vale tailings dam on Friday unleashed a torrent of mud on another small Brazilian community, Brumadinho, leaving hundreds missing and presumed dead.
While the company’s focus so far has been on the human tragedy, analysts and shareholders have little doubt that Vale cannot continue on the track its CEO set.
Schvartsman, 63, who said recently he would stay on through 2020 after his current term expires in May, designed Vale’s strategy around spending more than $10 billion in annual free cash flow as China gobbled up its high-grade iron ore.
Offering generous dividends, reinvesting in money-losing divisions and searching for mid-sized acquisitions – many of those plans may have to be abandoned as Vale braces for lawsuits that could grow into the tens of billions of dollars.
For the rest of this article: https://www.usnews.com/news/world/articles/2019-01-27/new-dam-disaster-puts-vale-ceo-deals-and-dividends-under-scrutiny