Vale halts bonuses and dividend after dam deaths

Mining giant Vale says it will curb dividends for shareholders and halt bonuses for managers.

Its statement comes as it starts to investigate the dam breach in Brazil which killed 58 people.

It is also setting up a committee to offer help to the victims.

Rescue teams searching for 300 missing people after the collapse on Friday say the chances of finding survivors are “very low”. The cause of the dam burst is unclear. The shares fell 20%.

The dam was holding back sludge byproduct from iron ore mining.

Courts have frozen a total of 11bn reais ($2.9bn; £2.2bn) of assets belonging to Vale, Brazil’s largest mining company to pay for damage caused by the mudslide following the dam’s collapse.

Judges ordered the company to check on a nearby dam in the mining complex to ensure it is stable and to make provisions for the survivors.

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Analysis by Daniel Gallas, BBC South America Business Correspondent

Brazil’s Vale is the world’s fourth largest mining company and the number one producer and exporter of iron ore.

Once a source of national pride it is rapidly becoming one of Brazil’s most hated corporations.

After the 2015 Mariana accident – that killed 19 people and caused the worst environmental damage in the country’s history – Vale vowed something like this would never happen again.

And then last Friday it did. This time the death toll could be in the hundreds, as hopes of finding new survivors are fading fast.

Vale faced criticism for its poor handling of the Mariana disaster but financially the corporation was going through a period of rapid growth.

There is anger in Brazil directed towards politicians too, who never tackled regulation changes after Mariana to make mining a safer business.

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Brumadinho Mayor Avimar de Melo Barcelos criticised the company for being “careless and incompetent”, blaming the firm for the dam burst and the state of Minas Gerais for poor oversight: “This tragedy destroyed our city.”

The company said it followed safety procedures.

Vale’s shares dropped 20% to 45 reais in Sao Paulo.

In November 2015, a dam owned by Vale and BHP Billiton, burst in Mariana, also in Minas Gerais. It killed 19 people in what was considered Brazil’s worst environmental disaster at the time.

Source: www.bbc.com