Vale SA, the world’s largest iron ore miner, knew final yr that the dam in Brazil that collapsed in January and killed a minimum of 165 folks had a heightened danger of rupturing, in accordance with an inner doc seen by Reuters on Monday.
The report, dated Oct. 3, 2018, reveals that Vale categorised Dam 1 on the Córrego do Feijão mine in Brumadinho as being two occasions extra prone to fail than the utmost degree of danger tolerated below the corporate’s personal dam security coverage.
Vale didn’t instantly reply to a request for remark.
It has beforehand cited an unbiased audit final yr declaring the dam secure and mentioned that tools confirmed the construction was secure simply weeks earlier than the collapse.
First proof of concern
The beforehand unreported doc is the primary proof that Vale itself was involved concerning the security of the dam. It raises questions as to why the audit across the identical time assured the dam’s stability and why the miner didn’t take precautions, resembling transferring an organization canteen that was simply downhill from the construction.
U.S.-listed shares of Vale prolonged losses following the Reuters story, dropping as a lot as 2.6 % to $11.10.
The corporate has misplaced 1 / 4 of its market capitalization — or practically $19 billion — because the Jan. 25 dam collapse, Brazil’s most dangerous mining accident.
The catastrophe within the mineral-rich state of Minas Gerais was the second main collapse of a mining dam within the area in about three years.
Entitled “Geotechnical Threat Administration Outcomes,” Vale’s inner October report positioned the Brumadinho dam inside an “consideration zone,” saying that “all prevention and mitigation controls” needs to be utilized.
A failure may value the corporate $1.5 billion and had the potential to kill greater than 100 folks, the report mentioned.
The dam was marked for decommissioning.
9 different dams in Brazil, out of 57 that have been studied, have been additionally positioned within the “consideration zone,” in accordance with the report.
A separate Vale report dated Nov. 15, 2017, additionally seen by Reuters, states that any construction with an annual probability of failure above 1 in 10,000 needs to be delivered to the eye of the chief govt and the board.
The dam’s annual probability of collapse was registered as 1 in 5,000, or twice the tolerable “most degree of particular person danger,” in accordance with the report.
“That is not good in my ebook, particularly when you take into account that these are supposed to be long-term buildings,” mentioned David Chambers, a geophysicist on the Middle for Science in Public Participation and a specialist in tailings dams.
Reuters was unable to substantiate whether or not the board or CEO Fabio Schwartzman have been made conscious of the chance related to the dam.
Vale has persistently mentioned the collapsed dam was declared sound by an unbiased auditor in September.
The audit by Germany-based TÜV SÜD, which was seen by Reuters, mentioned the dam adhered to the minimal authorized necessities for stability nevertheless it raised quite a lot of considerations, notably concerning the dam’s drainage and monitoring programs.
The auditor made 17 suggestions to enhance the dam’s security.
Vale mentioned the suggestions have been routine and that the corporate attended to all of them.
Its inner report recognized static liquefaction and inner erosion because the probably causes of a possible failure on the dam in Brumadinho.
‘Liquefaction’ in charge?
It’s nonetheless not identified what was behind the collapse, however a state environmental official instructed Reuters this month that each one proof pointed to liquefaction.
Liquefaction is a course of whereby a strong materials resembling sand loses power and stiffness and behaves extra like a liquid. It was the reason for the 2015 dam collapse, at a close-by mine co-owned by Vale, which resulted in Brazil’s worst-ever environmental catastrophe.
“We used to say these sorts of mining incidents have been acts of God, however now … we take into account them failures in engineering,” mentioned Dermot Ross-Brown, a mining business engineer who teaches on the Colorado College of Mines.
Vale has mentioned it’ll make investments some $400 million from 2020 to cut back its reliance on tailings dams, which retailer muddy detritus from mining.