Vale SA’s giant iron ore mines are bouncing back quickly from several days of heavy rain in southern Brazil, with annual output guidance intact. But the deluge has brought back into focus a far greater risk for the world’s No. 2 producer: tailings dams.
In the three years since the Brumadinho dam disaster that killed 270 people, Vale has been working hard to de-risk its waste storage, forsaking production volume to bolster safety in a largely successful bid to close a valuation gap with its major rivals. But last week’s rains showed tailings remain the Achilles heel of the Rio de Janeiro-based producer.