Vale declares force majeure on some contracts after deadly dam burst

BRASILIA/SAO PAULO (Reuters) – Brazilian miner Vale SA on Tuesday declared force majeure on some iron ore contracts from court-ordered halt towards mine liable for nearly 9 percent of its output after having a dam burst which likely killed a lot more than 300 people.

The force majeure on some iron ore and pellets sales contracts came after having a court on Monday ordered it to cure using eight tailings dams, including one affecting manufacturing of about Thirty million tonnes of iron ore output a year.

The force majeure is a latest manifestation of how the Jan. 25 disaster along the tailings dam at Vale’s Corrego do Feijao iron ore mine in Brazil’s mining heartland of Minas Gerais, which killed 142 people, with 194 still missing, is roiling the broader mining industry.

Iron ore prices have surged because the disaster, hitting a practically two-year high on Monday.

The force majeure announcement came as questions swirl around whether more could have been done to cut Brumadinho disaster, Brazil’s deadliest ever.

A report Vale commissioned in ’09 to look into the stability of the tailings dam certified being sound but raised concerns over its drainage and monitoring systems.

The report by German-based TV SD, reviewed by Reuters on Tuesday and marked as last updated in August 2019 , made a variety of recommendations aimed at improving the safety of your structure, You’ll find it said the dam adhered to the minimum law for stability.

Among problems identified were cracks in drainage channels, have got pictured while in the report. The audit also recommended setting up a new monitoring system equipped to pick up tiny movements during the soil.

LIQUEFACTION

Vale said with a statement it had followed the advice in the report, going without shoes described as “routine.”

Vale shares closed almost stable , at 44.68 reais, after having lost 15 % this month.

The report appeared at odds which has a statement from TV SD the next day the spill, which said “in line with our current state of data, no damages were found” on their inspection belonging to the dam.

Issues with drainage may be crucial in investigations towards the causes of the dam rupture, having state environmental official telling Reuters that evidence suggested the burst was caused by liquefaction.

Liquefaction is a process whereby solid material including sand loses strength and stiffness, behaving similar to a liquid.

It the kind of cause for the collapse of upstream dams holding mining waste, often called tailings, because their walls are mainly designed for built with dried tailings of sand and clay-like mud. Drainage issues could cause water to seep straight into the dried tailings, changing their consistency and stability.

“To enhance dam safety regarding failure from liquefaction, it is recommended to adopt measures to decrease the possibility of a trigger,” TV SD said in its evaluation of your dam, recommending avoiding work that may cause an “overload” from the dam’s reservoir.

“Setting up seismological monitoring products is also recommended near the dam.”

TV SD just didn’t respond to a request for comment.