THE Brumadinho dam disaster in Brazil on January 25 could have some far-reaching consequences, but Anglo American CEO, Mark Cutifani, said that the impact on the group’s own activities in the country would be limited.
Brumadinho is the place where Brazil’s state-owned mining company, Vale, operates its Feijao iron ore mine which, in turn, is part of the Paraopeba complex. The complex produced 26.2 million tonnes (Mt) of iron ore in Vale’s 2017 financial year, representing 7% of its total output.
It’s the second major tailings dam burst disaster in just over two years in Brazil. In the previous event, a tailings facility burst at Samarco – an operation owned by Vale in joint venture with BHP. Some 19 lives were lost.
The financial implications of the Samarco disaster have been significant with both Rio and BHP paying remediation under the $1.4bn Renova programme. Litigation with additional potential financial sanction also remains outstanding.
According to the most recent estimates, some 150 people were killed at Brumadinho and around 180 more remain missing. The impact of the event sent iron ore prices some 18% higher and whilst the focus remains on securing the area and managing the human face of the tragedy, the focus may shift in time to the permitting regime in Brazil.