Sat. Apr 20th, 2019

Brazilian miner Vale separates its chief executive due to Brumadinho's catastrophe | Economy

Brazilian miner Vale separates its chief executive due to Brumadinho's catastrophe | Economy

Five weeks after the breaking of a waste raft will kill in Brumadinho (Minas Gerais, Brazil) to more than 300 people, and while a hundred long corpses are still not located, the company that owns it has decided to temporarily remove from its position its executive president, Fabio Schvartsman. This and three other managers of Vale, one of the largest Brazilian multinationals, they left their positions this Saturday night after a meeting of the board of directors. On Friday, the federal prosecutor's office, the regional attorney's office and the Federal Police, investigating the dam's rupture on January 25, demanded that the company cease the four directors and a dozen employees. The current executive director of Vale, Eduardo Bartolomeo, replaces him in the position.

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The disaster of Brumadinho has put in the center of the debate the measures of security and control in this type of facilities because only three years ago another mine of the company Vale suffered a similar break. The collapse of Mariana, which is near Brumadinho, also in Minas Gerais, caused 19 deaths andto the greatest ecological catastrophe in the history of Brazil. When Schvartsman became CEO of Vale in May 2017, he adopted the slogan "Mariana never again". Twenty months later, a huge tongue of mud It swallowed 300 people between company workers and subcontractors.

The outgoing CEO of Vale, Fabio Schvartsman, in February.
The outgoing CEO of Vale, Fabio Schvartsman, in February. REUTERS

The Public Ministry of Mines announced on Friday the opening of an investigation into Vale for corruption on suspicion that its directors could deceive the authorities about the safety of the waste raft that collapsed. If convicted, the fine could be 20% of your gross income. With the announcement, the mining company's shares dropped 5.4% that day to recover somewhat later. Vale has appealed all the mines that were imposed by the disaster three years ago.

The event has meant, in addition to human losses, economic losses for the owner. On Wednesday, Moody's rating agency downgraded Vale de Baa3's investment grade to Ba1 worldwide. Since the Brumadinho catastrophe, the firm, which is the world's largest iron ore producer, has lost more than 16% of its value in the stock market, although since Schvartsman took over the reins has been revalued by 75%, according to the daily Folha.

Moody's says in its note this week that "although Vale's robust financial position offers good protection against possible financial impacts (from Brumadinho), the accident raises concerns from a social, environmental and corporate governance point of view, especially considering that occurred just over three years after the collapse of the Samarco waste dam [en referencia a la mina Mariana]" Vale has donated to the families of each of the victims 100,000 reals (about 23,000 euros).


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