SEC charges Brazilian mining company over safety claims
May 6, 2022
The charges follow the deadly Brumadinho dam collapse in January 2019.
The Securities and Exchange Commission (SEC) has charged Brazilian mining company Vale S.A. with making “false and misleading” claims about the safety of its dams prior to the collapse of the Brumadinho dam which killed 270 people.
The SEC has accused Vale, one of the world’s largest iron ore producers, of manipulating dam safety audits and of having obtained several fraudulent stability certificates.
The commission also alleges that Vale had misled local governments, communities and investors as to the safety of the Brumadinho dam.
The SEC said that the dam did not meet recognised standards for dam safety, alleging that Vale fraudulently assured investors in its sustainability reports and public filings that all of the company’s dams were certified to be in a stable condition.
The collapse of the dam, which was built to contain potentially toxic by-products from mining operations, killed 270 people, caused environmental harm, and led to a loss of $4 billion in Vale’s market capitalisation.
Melissa Hodgman, associate director of the SEC’s Division of Enforcement, said: “While allegedly concealing the environmental and economic risks posed by its dam, Vale misled investors and raised more than $1 billion in our debt markets while its securities actively traded on the NYSE.
“Today’s filing shows that we will aggressively protect our markets from wrongdoers, no matter where they are in the world.”
In response to the collapse, Vale has started to eliminate upstream structures in order to prevent a repetition of the collapse.
The collapse of the Brumadinho dam follows several other incidents in Vale’s past. Previously, another dam -the Mariana dam, which Vale co-owned – had collapsed in 2015.
In 2003, Vale was fined $3.5 million for the spill of 185 gallons of toxic chemicals into the Congohas River in Southern Brazil and more recently, in 2020, homicide charges were made against Vale’s former executives.
Vale has not responded to these allegations from the SEC.Last Updated: 6 May 2022