March 9, 2020 / 7:37 PM / 19 days ago

Brazil's Vale says iron ore mine near dam erodes further

SAO PAULO/RIO DE JANEIRO (Reuters) - Vale SA is monitoring further erosion in the embankment of its Gongo Soco mine over concern about its impact on the nearby Sul Superior mining waste dam, the Brazilian miner said on Monday, amid ongoing worry about its stability.

The world’s No. 2 iron ore producer, which said it is keeping authorities briefed on the situation, raised the emergency level at the dam last year after heavy rainfall eroded the reservoir of the structure near the city of Barao dos Cocais.

About 500 people seen at risk from a collapse of the dam were evacuated from their homes in February 2019 under orders from Brazil’s mining regulator weeks after Vale’s tailings dam at Brumadinho burst, killing more than 270 people.

Vale said it had finished building a barrier 6 kilometers away from the dam aimed at containing the tailings that would be unleashed in the event of a dam rupture, but that its effectiveness was “still pending verification by authorities.”

Shares of Vale were down 14.6% at 38.12 reais on Monday afternoon, roughly in line with the declines in some other global mining companies on a day when equities in general were hammered by concern about the new coronavirus.

Reporting by Carolina Mandl in Sao Paulo and Marta Nogueira in Rio de Janeiro; Editing by Louise Heavens and Matthew Lewis

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