Brazil Bans Upstream Mining Dams After Vale’s Latest Disaster

(Bloomberg) -- Brazil is prohibiting a specific type of tailings dam after two of those structures owned by miner Vale SA burst in recent years, causing death and environmental devastation.

All so-called upstream dams need to be decommissioned or removed by August 2021, according to a resolution the National Mining Agency, or ANM, published on Monday in the nation’s official gazette. Dam owners have until Aug. 15 to complete a technical plan for the dams, which at a minimum need to include reinforcing existing structures or building new retention structures.

In the most recent accident, a dam at Vale’s Feijao mine burst on Jan. 25, unleashing a torrent of mining waste that killed at least 169 people and contaminated rivers in Minas Gerais state. Vale has said it will spend 5 billion reais ($1.4 billion) to decommission its 10 upstream dams in the next three years. The upstream method is typically the cheapest way for miners to contain ponds of tailings waste, a byproduct of extracting iron ore. A costlier method pre-builds the walls and insulates them.

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The move is unlikely to affect global iron ore supplies significantly. Although more than 80 upstream dams made ANM’s list, the vast majority belong to small miners, many of which are used in the production of minerals other than iron ore.

Stepping up safety, Vale announced on Saturday it was evacuating 200 people near one of its inactive mines in Minas Gerais as a precautionary measure. The company is facing intense public pressure and criticism after its second dam spill in about three years. This most recent tragedy follows another deadly accident from 2015 when a dam ruptured at the Samarco joint venture Vale co-owns with BHP Group Ltd.

Iron ore prices have surged 21 percent this year on supply curbs stemming from Vale’s dam burst. Vale has shut about 70 million tons of supply in the wake of this year’s accident, although it says it plans to partially offset losses by lifting production elsewhere.

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