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Vale spent $ 1.6 billion on Brumadinho disaster repair this year

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Vale spent $ 1.6 billion on Brumadinho disaster repair this year

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Breaking the Vale dam in Brumadinho (Photo: REUTERS / Washington Alves / Copyright, via Agência Brasil)

Vale already spent approximately US $ 1.6 billion in 2019 on compensation for the disaster at the Córrego do Feijão mine dam in Brumadinho (MG), which occurred in January this year, leaving 270 victims, including dead and missing. The value is expected to be between $ 1.65 billion and $ 1.85 billion, the company announced at a New York Stock Exchange investor event on Monday.

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The mining company also announced its estimate of iron ore production for the coming years. The goal is to reach between 340 million tons and 395 million tons next year. By 2021, the volume would rise from 375 million to 395 million tons, reaching a range of 390 million to 400 million tons by 2022.

Did you see that? Nine months after Brumadinho disaster, Vale reports profit of R $ 6.5 billion in Q3

Following the January disaster this year in Minas Gerais, Vale remains with a 40 million tonne cut in iron ore production. It is estimated that this standstill will resume by 15 million tonnes by 2020 and the rest by 2021.

At the opening of the event, Vale's CEO, Eduardo Bartolomeo, announced that the company is designing a new action plan focused on safety and operational excellence, establishing what he called a new pact with society. He stated that this was the most difficult year in the company's history as a result of Brumadinho.

The company works on decommissioning nine dams that use the upstream system, the same as that used in Brumadinho. And it will invest $ 1.8 billion to promote dry system waste piling between next year and 2024.

Read more: CVM launches investigation on conduct of Vale executives in case of Brumadinho accident

On the morning of Monday, Vale issued a statement to the market announcing the suspension of the disposal of tailings from the Laranjeiras dam, which come from the Brucutu mine (MG). Thus, for a period of one to two months, the unit will operate at 40% of its full capacity, using wet processing, which results in filtered and stacked tailings. The impact will be a reduction of 1.5 million tons of iron ore per month.

Still, the company maintained its forecast for iron ore sales in 2019, which is 307 million to 312 million tons, and in this fourth quarter, from 83 million to 88 million tons. In the first quarter of 2020, however, production and sales are expected to fall to 68 million to 73 million, which the mining company credits not only to the gradual return of operations, but also to seasonality.

Investments for the next two years will be $ 5 billion each. Under the investment plan presented in New York, the selling price of iron ore is expected to return to the 2018 level and to break even within the next couple of years, at between $ 28 and $ 30 per ton. By 2019, this price is forecast to be $ 37 per ton.

Vale's pension fund: will accept membership of participants' families

Bartolomeo highlighted that Vale is building a new business model, focused on the commitment to build a safer company. He said it was too early to talk about paying dividends to shareholders. The payment was suspended after the Brumadinho disaster, which remains the company's main work target, the executive said.

Expenditure on repairs resulting from the breakdown of the Corgeo do Bean dam is estimated to be between US $ 1.5 billion and US $ 2 billion in 2020, maintaining a similar level the following year, between US $ 1.4 billion and US $ 1.4 billion. $ 1.9 billion. Later, between 2023 and 2031, Vale estimates another $ 8 billion.

Also on Monday, Vale reported receiving letters of resignation from two members of the Board of Directors. Marcio Hamilton Ferreira and Marcelo Augusto Dutra Labuto leave the seats of Coordinator of the Financial Committee and member of the Compliance and Risk Committee, respectively.

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