Vale Faces Spiralling Losses After Brazil Dam Collapse

By Samantha Pearson 

SÃO PAULO -- Vale SA said Monday it had suspended dividend payments and share buybacks as the miner faces spiraling losses over its dam that burst leaving hundreds of people missing and presumed dead in southeast Brazil.

The iron ore miner also froze executive bonuses and created independent committees to help victims and investigate the cause of what is shaping up to be the world's most deadly mining disaster in over 50 years.

The death toll had risen to 58 by Sunday night, but rescue workers were losing hope Monday of finding another 300 or so people alive who were buried under thick mud when the Vale-owned dam burst Friday.

The dam's collapse in Minas Gerais state has sparked outrage across Brazil, especially as it comes only three years after another dam part-owned by Vale also burst nearby, killing 19 people and causing widespread environmental damage.

Judges have already frozen about $3 billion in total of the company's assets, in response to Friday's disaster, to fund relief efforts and structural work to shore up the dam, Vale said in a statement.

Brazil's environmental agency IBAMA has also fined Vale $66 million, while the state of Minas Gerais has ordered the miner to pay $26 million as a penalty for the breach.

Rating agency Standard & Poor's warned Saturday that it could cut Vale's BBB-rating by several notches as a result of the disaster, citing concerns over fines and the possibility that the company could be stripped of some operating licenses.

Write to Samantha Pearson at [e-mail]

(END) Dow Jones Newswires

January 28, 2019 05:07 ET (10:07 GMT)

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