ANM to Halt Operations at 47 Brazilian Mining Sites; 25 Vale Dams Included

ANM Avoiding Another Brumadinho From Happening

The Company’s operational dams were under scrutiny after a tailings dam at the Córrego do Feijão mine, 9 kilometres from Brumadinho, collapsed in January 2019, leading to an unrestricted heavy mudflow through the mine’s office and camp area.The incident claimed lives of approximately 270 people, of which 11 were never found and were later assumed dead.

It is to be noted that the Córrego do Feijão mine was owned by Vale, which also witnessed the November 2015 Mariana dam disaster. Brazilian prosecutors charged Vale, its ex-chief executive officer Fabio Schvartsman and its auditor TÜV Süd on the trial for the dam collapse.

In October 2019, fifty-four dams in the country had either failed to prove their stability or even file the stability paperwork at all.The new list of 47 dams includes some of the same dams from the last year defaulters.

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Vale’s take on Dam’s Safety Issue

Vale, the world’slargest iron ore exporter, informed on 1 April 2020 that the Company continues to advance its Tailings Management System (TMS).

Due to this initiative, as an addition, the Company adopted the Engineer of Record role (EoR) to assess its dams in Brazil.Recommended by the Canadian Dam Association (CDA), Mining Association of Canada (MAC) and the Extraordinary Independent Investigation Committee as a good practice, EOR is accountable for conducting a regular dam safety inspection and report the outcomes of the inspection and monitoring activities.

The concept of EOR would act as the first line of defence for Vale, ensuring the safety of its structures and communicating to the senior management in order to take any necessary decisions.The Company believes that the internal evaluation standards on the safety of its asset structures are well at par with the regulatory requirements.

Stability Condition Declaration: New Mandate for Brazilian Mining Industry

As per the new regular and stringent supervision, a change in stability of the structure can be declared through a Stability Condition Declaration (DCE) at any point of time during the year.

The Company also notified that a total of 78 positive Stability Condition Declarations, in compliance with the ordinance 70.389/17 of the National Mining Agency, were granted to its structures at the operational assets (base metals and iron ore) acrossthe country.

Vale Action on Negative DCEs

Additionally, 9 tailing dams have been listed below, owing to negative Stability Condition Declarations, at the second and third emergency levels of the Mining Dams Emergency Action Plan (PAEBM). Though the Company had already evacuated ZAS or the self-rescue zones at these dams, the ZAS evacuation plan initiated at the Doutor dam in February is due for completion by end-April 2020.

Evacuation procedureat these structures was targeted towards ensuring the safety of downstream communities. Efforts are being made to dry out and reduce the water disposal from the nine tailings dams. This would prevent the collapsing of the dams that could under high water levels.

For the dams at emergency level 3, Vale is already building three containment structures to fill in the water flowing downstream. The containment structure at the Sul Superior dam has already been completed and the Company anticipates other two to be completed in the first half of 2020.The containment structuresare being constructed as per international technical specifications and would probably withstand any extreme volumes of water in case of rupture.

TheSelf-Rescue Zones (ZAS) are not being evacuated at the 18 structures at the PAEBM emergency level 1.Review and works have commenced to increase the stability of these dams.

Vale believes that the new process of constant monitoring of dams through EoR could be the full proof solution to this issue with the evaluation of the EoR process.Given the establishment of new criterion and parameters for safety, 8 new dams were included in this half yearly Negative DCEs and were classified as Level 1.

The Brucutu plant, which disposed tailings from the Norte/Laranjeiras dam, which is at level 1 since 2 December 2019, would continue to operate at ~40% of its full capacity through wet processing and tailings filtration. Operational and geotechnical teams are evaluating alternatives for tailings disposal for the time being with the assessment likely to even lead to increase in the plant capacity by another 40% tobring the total to ~80%. Such alternative arrangements are essential to avoid any impact on the annual iron ore fines production volume for 2020.

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Santana: The one that didn’t file DCE

Vale had acknowledged that its Santana dam in Itabira had failed to file the declaration of stability of the structure.The Santana dam was placed on level 1 since last October and is placed on round the clock monitoring with the Company planning to make structural improvements in the later part of 2020 to reinforce the dam stability.

Though suspension of operations is not economical for any business and may even lead to shortage of key products on a global level.

However, for someone as large as Vale with the history of major incidents killing hundreds of people, safety standards need to be enforced. The action of Brazilian National Mining Agency, ANM, is expected to lead to the adoption of safer mining practices worldwide.