Vale loses license to operate key Brazil dam after disaster

[RIO DE JANEIRO] Brazilian mining giant Vale on Wednesday lost its license to operate the Lanjeiras dam, vital to its biggest mine in southeastern Minas Gerais state, the firm said.

The decision comes two weeks after another dam storing mining waste collapsed in the village of Brumadinho - 160 kilometers away - leaving at least 150 dead and 182 missing.

It was the second such disaster in three years at a mine owned by Vale, the world's biggest iron ore producer.

"The State Secretary for Environment and Sustainable Development...cancelled the Provisional Operational Authorization of the Laranjeiras dam," Vale said in a statement Wednesday, adding the decision was due to an ongoing public civil suit against the company.

The Laranjeiras dam has been paralysed since Monday after a court order suspended the Brucutu iron ore mine - Vale's biggest in Minas Gerais, with estimated annual production of 30 million tons.

Vale insisted the dam was constructed properly and is certified as stable.

The Minas Gerais government also canceled Vale's license to operate the Jangada mine, where work has also been halted in the wake of the Brumadinho disaster.

News agency G1 reported Wednesday that Vale had detected problems in data from sensors monitoring the dam's stability two days before the tragedy, according to company emails discovered by police.

Wednesday's decision saw Vale shares plummet 4.63 per cent on the Sao Paulo Stock Exchange, and 6.19 per cent on the New York Stock Exchange.


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