Valeof Brazil, the world's iron ore giant known as Brazil's "crown jewel", has signed an agreement with the government of Minas Gerais state and other relevant departments to compensate the local government and community about 37.7 billion reais (about 6.9 billion US dollars) for the dam break in brumadinu in January 2019.

The compensation of $6.9 billion may be the result of a compromise agreement between Minas Gerais and vale

The reporter learned that the negotiation between vale and Minas Gerais lasted for more than four months. In November 2020, the governor of Minas Gerais rejected Vale's settlement proposal of about 21 billion reais (US $3.97 billion) and demanded compensation of 54.6 billion reais (US $10.3 billion), including relocation and psychological injuries suffered by survivors and victims' families. This time, the final compensation amount of the agreement is US $6.9 billion, which is close to the middle value of the compensation amount proposed by Minas Gerais and vale, or the compromise result reached after negotiation between them. Although the final amount of compensation is lower than the initial figure proposed by the state government, it is still the highest amount ever paid by Brazilian enterprises due to production accidents.

"This is the largest deal in Brazil's history. Vale's compromise is a milestone, a hard won victory against impunity. For a long time, the power of mining enterprises often exceeds that of relevant government departments, and the phenomenon of impunity occurs from time to time. Now all this needs to be changed. " The Secretary General of Minas state government said recently.

On January 25, 2019, a mine dam of vale in brumadinu, Minas Gerais, broke, causing more than 270 deaths and 11 people still missing, making it one of the most serious safety accidents in the history of Brazil.

Local media reported that there were 427 people in the mining area, and mud and garbage from the dam break swept the city of brumadinu and other nearby villages. The waste and water stored in the tailings form debris flow, and the office facilities and nearby communities are destroyed after the dam break. The area was about 150 meters wide and several kilometers long, Reuters reported.

According to CNN reports at that time, there were about 12.3 million cubic meters of mining waste in the dam, and most of the mud and toxic substances flowed into the paraopeba River, a tributary of the Sao Francisco river. The tailings dam burst caused serious damage to the surrounding ecological environment.

Vale said it would make full compensation for several mine accidents

Vale issued a statement on the same day, saying that according to the agreement, the company will provide cash compensation to the towns and victims affected by the accident, and support the local government to restore the damaged environment and promote the construction of livelihood projects.

It is reported that nearly 7 billion US dollars in compensation will be used for victims' compensation, reconstruction of disaster stricken areas, job recovery, environmental restoration, water quality improvement, subway and road construction, and improvement of medical conditions. However, recently, representatives of the victims' families protested that the accident victims were not given the right to participate in the negotiations.

Founded on June 1, 1942, Vale is the largest producer and exporter of iron ore in the world. It is also the largest mining company in the American continent, mainly engaged in metal smelting and mining. It is one of the largest logistics enterprises in Brazil. However, the January 2019 mine disaster is not the only one in vale in recent years.

On November 5, 2015, samarco, a 50:50 equity joint venture between vale and BHP Billiton, broke its Fundo iron ore tailings dam near Mariana City, Minas Gerais, killing 19 people and eventually leaking 60 million cubic meters of waste.

The dam break in 2015 affected the living environment of thousands of people in Rio Doce River Basin, making 250000 people unable to drink water normally. About 60 million cubic meters of pollutants go into the river and eventually into the Atlantic Ocean.

Over the past few years, many mining accidents have put vale at the forefront of public opinion. On the day of the announcement of the agreement, Vale CEO Eduardo Bartolomeo said: "vale will fully compensate for all kinds of losses caused by the dam break in brumadinu, and will be committed to promoting the people's livelihood in the areas where the company operates."

Vale aims at carbon neutrality to restore its credibility?

At present, Vale is in urgent need of export. In January, Vale took the first step in divesting its coal business.

On January 20, Vale announced that it had signed an intentional agreement with Mitsui products Co., Ltd. (hereinafter referred to as "Mitsui"), according to which the two sides would orderly push Mitsui to withdraw its shares from moatize coal mine and nakala logistics corridor.

Vale, as the world's largest producer of iron ore and pellets, as well as the largest producer of nickel metals, operates large-scale logistics systems in Brazil and other parts of the world, including railways, sea terminals and ports. It also has a logistics center to support the global distribution of iron ore. Among them, Nacala logistics corridor is a heavy haul railway invested and constructed by vale company. It is located in Mozambique, starting from moatize mining area in Tete province and ending at Nacala port.

Photo from: vale official website, www.vale.com

Over the past 15 years, Vale has worked with the governments of Mozambique and Malawi to mine the moatize coal mine and develop a 912 km Nacala logistics corridor to serve coal transportation.

Vale said that after completing the acquisition process, Vale will start the divestiture of its coal business. At that time, Vale will look for third parties interested in these assets while maintaining the operation of moatize coal mine and Nacala logistics corridor.

Vale stressed that as an important step in Vale's divestiture of coal business, the signing of this agreement of intent is in line with the company's capital allocation principles and the goal of simplifying the product portfolio, and will strengthen the company's commitment to the Paris Agreement.

Vale said it would continue to support the project to reach production capacity while conscientiously looking for investors in the coal business. The company expects that sustainable results will be achieved in the new mining plan and two new operation strategies of the coal concentrator in moatize coal mine. The new mining plan requires priority to mine ore bodies with better quality and higher stripping ratio, so as to improve the quality of product portfolio and reduce costs.

Earlier, on May 12, 2020, Vale also announced that it would invest at least $2 billion to reduce direct and indirect absolute emissions by 33% by 2030. Through this plan, Vale intends to achieve carbon neutrality by 2050. So, can vale reshape its corporate image and recover its reputation crisis by taking the "carbon neutral" move? Let's see.

News words

What are "tailing pond" and "tailing dam"?

"Tailing pond" is used to store the tailings discharged from the mine after ore dressing. In the process of mining, the useful components in the ore will be recycled as products. Taking iron ore as an example, the most useful components are Fe3O4 or Fe2O3, and the remaining non recyclable gangue is tailings. The tailings pond is divided into wet discharge pond and dry pile pond. The iron ore is mainly wet beneficiation, and the final tailings are discharged to the tailings pond for storage in the form of slurry. Tailings dam break often occurs in wet discharge reservoir, and once dam break occurs, it will do great harm. In order to avoid environmental pollution, most countries prohibit the arbitrary discharge of mine tailings. The tailing pond needs to be determined after site selection, safety and environmental protection demonstration. Generally, the appropriate valley will be selected according to the terrain, and the dam will be built at the mouth of the valley. If there is no valley terrain, the dam will be built around the flat ground.

"Tailing dam" is a structure around the tailing pond to block tailing and water. The selection of tailing dam site should also consider the hydrogeological conditions, construction conditions, reservoir capacity and other factors. Tailings dam construction methods mainly include upstream type, middle line type, downstream type and one-time construction, among which upstream type is the most common.

Source: China Environment News