Prosecutors want to cancel Vale’s $44m Brumadinho deal

The aftermath of the disaster in Brumadinho after Vale’s tailings dam collapsed. Photo by Felipe Werneck/Ibama, Wikimedia Commons.

Federal prosecutors in Minas Gerais, Brazil, want to cancel a R$250 million ($44 million) agreement between Vale (NYSE: VALE) and the Brazilian government over compensations for the disaster in Brumadinho, which killed 270 people in 2019.

The prosecutors claim that judge Mário de Paula Franco, from the 12th Federal Civil and Agrarian Court of Minas Gerais, did not have the competence to validate the negotiation and that the public attorneys did not participate in the agreement sealed last month by the miner, the federal government, the Brazilian Institute for the Environment and Renewable Resources (IBAMA) and the Chico Mendes Institute for Biodiversity Conservation (ICMBio).

The agreement gives scope to transfer to Vale, “in a veiled way,” the management of national parks in Minas Gerais


According to the prosecutors, the judge “has nothing to do with the disaster” at Brumadinho, despite being responsible for the case of another disaster involving Vale, which occurred in Mariana three years earlier. They said that the agreement has the potential to transfer to Vale the management of some national parks located in Minas Gerais.

This is because the document provides for the allocation of R$150 million ($26 million) to seven national parks in Minas Gerais. According to the prosecutors, the terms for the agreement give scope to transfer to Vale, “in a veiled way,” the management of conservation units.

Vale said that the agreement was submitted to the IBAMA, ICMBio, the Ministry of the Environment and the General Attorney’s Office of the Union, having been approved by them and approved in court. According to the company, the document does not provide for the transfer of the management of national parks to Vale.

Earlier this month, federal prosecutor Edison Vitorelli told Reuters that the miner has not complied with a number of commitments signed with authorities to prevent another disaster.

Twenty-nine dams that Vale uses to store mining waste still present elevated safety risks, according to Vitorelli.

Some of the mines linked to the dams that Vitorelli’s team regard as unsafe are vital to Vale’s plans to recover lost iron ore production and grow capacity to 450 million tonnes per year, a level that would make it once again the world’s largest producer of the steel-making raw material.