Mine Collapse Fear Hits Braskem Shares and Credit Rating

Braskem, a Brazilian petrochemical giant, is facing a critical situation in Maceió, Alagoas state, in the Northwest of the country.

Their rock salt mine near Lagoa Mundaú is at risk of collapsing, prompting a 180-day emergency declaration.

The mine has shifted vertically by 1.42 meters and is sinking at 2.6 centimeters per hour, increasing fears of a collapse.

Braskem’s stock value has dropped significantly, with a recent fall of 6.85%, reflecting a weekly decline of 11.88%.

Fitch Ratings warned of the potential impact on Braskem’s financial health and credit rating, leading to a downgraded rating outlook.

Additionally, Braskem faces a legal challenge demanding 1 billion reais (about $202 million).

In July, Braskem agreed to pay 1.7 billion reais (approximately $343.4 million) for property damages in Maceió.

Market analysts saw this as a positive step but cautioned about further challenges. Insiders estimate the new issues could cost hundreds of millions of reais.

This crisis adds uncertainty to Braskem’s future and could impact its parent company, Novonor.

Petrobras, another major stakeholder, is reassessing its involvement in Braskem.

The Maceió community faces direct consequences, with over 60,000 people evacuated from their homes since 2018.

Braskem halted its rock salt mining in 2019 and now imports salt from Chile.

The company is committed to safely closing the salt wells, with 70% of the work completed and expected to finish by mid-2025.

Braskem continues to monitor mine 18 closely, taking necessary precautions to minimize potential impacts.

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