Vale Will Keep Paying for Its Dam Disasters
A year on from the Brumadinho collapse, the miner’s shares have regained their pre-accident level. That looks overly optimistic.
The river of sludge.
Photographer: Pedro Vilela/Getty Images
A year ago, I sat with Vale SA’s then-Chief Executive Officer Fabio Schvartsman in Davos, sipping lukewarm coffee. He chatted amiably about the next stage of the turnaround at the Brazilian mining giant, unaware that within 24 hours a river of sludge from one of his dams would take 270 lives in the town of Brumadinho. This week, he was among executives and former employees charged with homicide.
The disaster on Jan. 25, 2019, a human and environmental catastrophe that’s been compared with BP Plc’s Deepwater Horizon oil spill, was supposed to be a moment of reckoning. It was, after all, Vale’s second such accident in just over three years. Yet 12 months on, shares in the $70 billion group are back at pre-Brumadinho levels, pointing to something less dramatic. The rebound also suggests investors are struggling to grasp the painful longer-term costs of such accidents for the company and the industry, in the era of stakeholder capitalism.