By Richard Mann, Contributing Reporter
RIO DE JANEIRO, BRAZIL – As reported two days ago, Rio based mining giant Vale is in bad shape. Production dropped in Q1 in all segments due to the deadly Brumadinho dam collapse, unusual weather, as well as production shutdowns in Japan and China.
The Brumadinho tragedy cost Vale R$19 (US4.9) billion in the first quarter as they provisioned R$9.3 (US$2.3) billion for compensation and remediation payments and R$7.1 billion to deactivate tailings dams, not to mention stoppages, fines, and other costs.
As a result, Vale reported negative EBITDA for the first time ever in its 77-year history. Net losses totaled R$6.4 (US$1.6) billion in the first quarter. Revenue, meanwhile, was up, with net sales rising 11 percent to R$31 (US$7.75) billion thanks to higher prices in the Chinese market.
Eduardo Bartolomeo, recently confirmed as Chief Executive Officer by the Board of Directors, commented: “I am committed to leading Vale through the most challenging moment in its history.”
The company has had two catastrophic tailings dam failures in Brazil: Mariana, in 2015, and Brumadinho, in 2019. The Brumadinho dam disaster caused the company to lose its license to operate eight tailings dams in Minas Gerais and its stock to lose nearly 25 percent in value.