A deadly dam disaster in its home country of Brazil has put Vale SA in the red. On the bright side for Sudbury, however, the company remains cautiously optimistic about the demand and price for nickel.
Bloomberg News reports Vale suffered the first quarterly loss since late 2015 as the company set aside funds to cover damages, legal costs and other obligations related to the dam disaster that left hundreds dead in January.
The agency said he world’s largest iron ore producer set aside US$4.5 billion and posted a loss of $1.64 billion as the company comes under strict government scrutiny that resulted in authorities freezing billions of dollars of its assets to ensure the victims will be compensated and environmental remedies will be implemented.
The provision matches the amount that various Brazilian courts have ordered frozen, which the company had disclosed in April. The outlook for the company’s prospects are dimming, Bloomberg said.
On Monday, Rio de Janeiro-based miner scaled back its 2019 outlook, saying sales of iron ore and pellets will likely be in the middle-to-lower end of its guidance after a local court ordered that operations at its Brucutu mine be shuttered for a second time.
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