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Vale continues tailings dam decommissioning

Vale continues tailings dam decommissioning

Brazil iron ore major Vale expects to book US$671 million in net new provisions related to its tailings dam decommissioning programme when it reports full-year 2019 and December-quarter financial results next week.  


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Roughly a year after the catastrophic Brumadinho tailings dam burst, which killed about 270 people, the company said it was still reeling from the incident, characterising 2019 as “the most challenging year of its history”. However, it said it was making progress on the “decharacterisation” of nine at-risk tailings dams, with the first, 8B, completed in December and a second, Fernandinho, expected to be concluded later this year. Vale has also completed construction of a containment structure for the Sul Superior dam in the city of Barão de Cocais, while containment structures for the B3, B4 and the Forquilhas dams will be concluded by June. Decharacterisation work at these sites will start thereafter. The company said it was reducing existing provisions for the decharacterisation programme by $447 million. However, a closer look at the tailings dams of concern revealed some of them to have smaller internal dykes that were built using the same upstream construction method as the failed Brumadinho dam, and that these structures would therefore also be decharacterised. This requirement led to a $315 million expansion in provisions. Compounding the event’s massive impact on Vale’s operations were new regulations released in August requiring the decharacterisation of certain drained stack structures, which Vale said would require a further $716 million in provisions. Taken together, including further provisions of about $87 million for at-risk structures near Córrego do Feijão, the company expects December-quarter earnings to be impacted by a net $671 million. Meanwhile, Vale also on Tuesday reported weaker than expected iron ore output for the final three months of 2019, confirming Australia-based diversified miner Rio Tinto as the world’s top iron ore producer. Vale said its iron ore fines production totalled 302 million tonnes in 2019, 21.5% lower than in 2018, while pellet production was 41.8Mt in 2019, 24.4% lower than the prior year. This compared with Rio Tinto’s 2019 iron ore output of 326.7Mt. Vale’s December-quarter production was weak owing to unscheduled maintenance in the iron ore and copper business segments, and the suspension of some pellet capacity due to weak markets. Vale said it had about 40Mtpa of idled capacity, and it was working with regulators to resume operations.  
Originally published by Mining Magazine.  
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What is the Investor Mining and Tailings Safety Initiative?

Following the recent tailings dam failures, The Investor Mining and Tailings Safety Initiative was established by a group of institutional investors active in the extractive industries representing more than $13.1 trillion in assets under management. Governed through a Steering Committee chaired by the Church of England Pensions Board and the Swedish Council of Ethics of the AP Funds, the group has called upon 727 extractive mining companies to disclose information in relation to their tailings storage facilities to form an online database.

How many companies have disclosed information about their TSFs?

As of the 20th of December 2019, 46 per cent of companies contacted responded to the request. 40 of the top 50 mining companies have made disclosures which has resulted in information about thousands of individual tailings dams being made public on company websites. All 23 of 23 publicly owned companies that are members of the International Council on Mining & Metals (ICMM) responded and fully disclosed information about their TSFs.

How many tailings dams have had stability issues?

Company disclosures to investors have revealed that 10% (166 out of 1,635) of the tailings dams reported to have had stability issues in their history.

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