Damning report last year already questioned the safety of Vale’s disaster dam

VALE, the world’s largest iron ore miner, knew last year that the dam in Brazil that collapsed in January and killed at least 165 people had a heightened risk of rupturing, according to an internal document seen on Monday.

The report, dated October 3, 2018, classified the dam at Brumadinho in the state of Minas Gerais as being two times more likely to fail than the maximum level of risk tolerated under internal guidelines. The previously unreported document is the first evidence that Vale itself was concerned about the safety of the dam.

It raises questions as to why an independent audit around the same time guaranteed the dam’s stability and why the miner did not take precautions, such as moving a company canteen that was just downhill from the structure.

Vale said that the report, called “Geotechnical Risk Management Results”, comprised the views of specialist engineers, who are obliged to work within strict procedures when they identify any risks. “There is no known report, audit or study with any mention of an imminent risk of collapse at Dam 1 in the Córrego do Feijão mine in Brumadinho,” Vale said. “To the contrary, the dam had all its certificates of safety and stability attested to by local and foreign specialists.”

US-listed shares of Vale extended losses on Monday following the story, dropping as much as 2.6 percent to $11.10. The company has lost a quarter of its market capitalisation – or nearly $19 billion – since the January 25 dam collapse, Brazil’s most deadly mining accident.

The disaster was the second major collapse of a mining dam in the region in about three years, following a similar disaster in 2015 at a nearby mine co-owned by Vale.