Vale faces investors lawsuit linked to Brumadinho dam burst
A group of investors in Brazil’s Vale (NYSE:VALE), the world’s top iron ore producer, is seeking compensation for loses linked to the deadly dam burst in Brumadinho in January this year, which killed more than 300 people and caused extensive property and environmental damage in the region.
The group, made up of about 25 asset management firms and some pension funds, argues that Vale did not disclose information about risks facing the dam in the state of Minas Gerais to the market, even though it was aware of it, local newspaper Valor Economico reported on Wednesday.
They claim that, due to the lack of transparency as well as measures taken by from the government and prosecutors, the company’s shares have lost almost 30% of their value.
The news comes on the heels of Vale’s announcement of a $107-million compensation (400 million Brazilian real) to workers impacted by the rupture of the dam at its Córrego do Feijão mine.
Last month, Vale said that it had so far paid emergency compensation to around 100,000 residents of the municipality and region where the mine is located.
It also announced that it plans to spend R$1.8 billion ($471 million) by 2023 on several projects to stabilize remaining structures at Córrego do Feijão. Other programs include reducing tailings flow into the Paraopeba river and ensuring proper disposal of tailings and rebuilding public facilities. The projects are expected to generate around 2,500 jobs.