Brazil's Vale 2Q Net Profit Declines 34% At $1.1 Billion

   By Rogerio Jelmayer 
 

SAO PAULO--Brazilian mining company Vale SA (VALE) saw a 34% decline of its net profit in the second quarter, as it adopted a provision worth $1.2 billion relating to last year's deadly dam failure at its iron-ore mining operations it jointly owns with BHP Billiton Ltd (BHP).

Vale on Thursday reported a second-quarter net profit of $1.1 billion, down from $1.68 billion in the year ago period.

The company said it recorded provisions to cover estimated funding needed by the Samarco Mineracao S.A. joint venture under an agreement signed with Brazilian authorities in March. In a separate statement, BHP said it would record a provision of between $1.1 billion and $1.3 billion.

The Samarco dam spill released an avalanche of sludgy mine waste that killed 19 people, destroyed villages and polluted more than 400 miles of rivers before spewing into the Atlantic Ocean. It is widely considered to be Brazil's worst-ever environmental catastrophe.

Meanwhile, Vale's net operating revenue was $6.6 billion in the second-quarter, down from $6.9 billion in the prior period.

Its net debt ended the period at $27.5 billion, up from $26.5 billion in the second quarter a year ago.

Write to Rogerio Jelmayer at [e-mail]

(END) Dow Jones Newswires

July 28, 2016 06:11 ET (10:11 GMT)

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