Vale (NYSE:VALE) has been ordered by a Brazilian court to present $1.47 billion in guarantees by July 23, 2020, connected to the 2019 Brumadinho dam disaster that killed more than 100 people.
The decision to present $1.47 billion guarantees rescinded
The amount the company will deposit will support the enforcement of any possible fines or forfeiture of rights, assets, and values associated with the disaster. In May, a court in the Mina Gerais ordered the company to present guarantees, but the company indicated that it will appeal the decision.
Following the appeal, in June, another court ruling suspended the earlier decision. The disaster occurred on January 25 last year and covered the neighboring Brumadinho buildings with mud. According to rescue teams, over 270 people reportedly went missing following the incident. Official information state that when the dam released a river of mud to the neighborhood, warning sirens were not triggered.
In May city of Brumadihno suspended the operating license of the company following allegations that its onsite activities were violating social isolation rules. A court in Minas Gerais revoked the suspension after Vale argued that the suspension was effected to combat spread COVID-19. Still, in the real sense, it was a retaliation for its failure to offer emergency aid to the whole population of the city.
Vale to resume payment of dividends soon
Vale has also said that it is yet to decide about the resumption of dividend payments that it suspended last year following the dam incident. At the beginning of this month, its CEO Luciano Siani Pires, told investors that the company was set to start paying dividends but could not specify when they plan to begin. The company is waiting for more certainty around the COVID-19 pandemic before it can approve the payment.
Early this month, Siani Pires said that the resumption of dividends’ payment will depend on China’s behavior. Currently, China is the largest iron ore consumer, and it accounts for 755 of total consumption. As a result, they are monitoring the risks of a second wave outbreak.