Vale Pref (EU:VALE5)
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By Paulo Trevisani
BRASILIA -- Brazilian officials are preparing to toughen mining safety rules to require waste-dam owners of the type that failed last month, killing 150 people, to fix or close them, the mining regulator's top official said on Friday.
"We need to put an end to this," said the agency's chairman Eduardo Leão. "These dams are ticking time bombs."
The Mining National Agency is set to publish as soon as Monday new regulations ordering miners to destroy or substantially reinforce so-called upstream tailings dams, Mr. Leão said. Such waste dams are widely considered the least safe and less expensive type of deposits for mining residues.
The goal is to protect the country from dams holding tons of potentially dangerous waste produced by Brazil's giant mining industry. Of the country's more than 700 mining dams, 88 are classified by the regulator as "upstream or unknown."
Mr. Leão, who took over the job last month with the new administration of President Jair Bolsonaro, said the proposal will be submitted for public debate for a couple of weeks before kicking in.
He said the agency estimates mining companies will take no longer than three years to fix or close those dams. Their options would be either removing the waste and destroying the structure, or transforming them into safer "downstream" dams, he said.
In the meantime, the dams' owners will have to submit daily readings of mandatory monitoring equipment, as opposed to every 15 days as it is currently done.
The readings will be feeding into an online platform that sends automatic alerts when something is wrong, as they now are, Mr. Leao said. Independent auditors will also continue to visit the dams twice a year to attest to their safety.
The system failed tragically on Jan 25, when a tailings dam burst in the rural town of Brumadinho, spewing a sea of mud over a valley from which 157 bodies have been recovered so far. Officials fear nearly 200 people still missing are likely dead.
Brazilian authorities are trying to pinpoint the disaster's cause and are investigating whether Vale was aware of any potential risks to the integrity of the dam. The Wall Street Journal has reported that a safety auditor on the dam told police he felt pressured to attest to its stability despite indications it was unsafe because he feared losing business with the company, according to court documents.
Mr. Leao said he is asking the Mines and Energy minister to add 50 field inspectors to the regulator's staff of 34 to improve oversight. In total, they oversee 740 dams.
The owner of the Brumadinho's dam, Brazil's Vale SA, the world's largest iron ore miner, lost about a quarter of its market value since the accident as it scrambles to quell concerns about the upstream dams.
Another upstream dam collapsed just over three years ago in a nearby town called Mariana, killing 19 people and contaminating hundreds of miles of river valleys.
On Friday, Vale said it was evacuating 500 people living near another such structure it owns. The company said Brazil's regulator ordered the move after a local consulting company refused to attest to the safety of the dam, known as Sul Superior, in the Gongo Soco mine.
The consulting firm, WALM Engenharia e Tecnologia Ambiental Ltda., said its evaluation of the dam didn't provide "the necessary indicators to attest to the dam's stability."
Vale said the Sul Superior dam has been inactive since 2016, when the company stopped adding mining waste to the structure, but it would still increase inspections and bring in foreign experts to "re-evaluate the situation."
Another company, India's ArcelorMittal, said Friday it had evacuated around 200 people from the area surrounding its Serra Azul mine, just 13 miles north of Brumadinho, citing concerns over the safety of a tailings dam there.
ArcelorMittal said it decided to move people from the community after receiving an updated assessment on the dam from an independent review panel as a precautionary measure while engineers run further tests on the dam, which has been idle since 2012.
"Sound inspections are fundamental to ensure safety," said José Marques Filho, vice-president of the Brazilian Dams Committee, an engineering trade group. "We need to mitigate risk and avoid hysteria."
Write to Paulo Trevisani at firstname.lastname@example.org
(END) Dow Jones Newswires
February 08, 2019 17:03 ET (22:03 GMT)
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