Vale opens talks on compensation for dam disaster victims

Brumadinho, where Vale SA’s dam collapsed. Photo Jeso Carneiro | Flickr.

Brazilian iron ore miner Vale SA has opened negotiations with prosecutors and families of the Brumadinho dam disaster victims, according to reports by Reuters, with the aim of defining compensation.

The company said it has signed a term of commitment with the Minas Gerais state prosecutors’ office, which will be in charge of receiving expressions of interest from families seeking compensation.

On Monday, Germany’s third largest asset manager Union Investment, which manages €338 billion in assets, sold all the bonds and shares it held in the company, according to the Financial Times.

The price of iron ore hit multiyear highs this year in the aftermath of Vale’s dam collapse in January, which hurt global production and shipments. Now, the “physical consequences” have started to reach the market.

Iron ore futures went up 3.2% to $93.69/ton in Singapore on Monday, but the price could reach $100 based on estimates conducted by Citigroup, which cited “very, very low” seaborne cargo numbers in China.

“Iron ore is not a demand story, it’s a supply story,” said Ed Morse, Citigroup Inc. Global Head of Commodities Research, in a Bloomberg interview.

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