Vale sees no sign of environmental breach at suspended mines

26th February 2024 By: Reuters

Vale sees no sign of environmental breach at suspended mines

Mark Cutifani

SAO PAULO - Brazilian miner Vale does not see signs of environmental or social breach at two of its mines whose operating licenses were suspended this week, Vale Base Metals chair Mark Cutifani said on Friday.

Speaking at a conference call about the miner's fourth-quarter results, the executive said an administrative issue could have led to the suspensions at the mines in Para state in northern Brazil, and that Vale would work with authorities to resolve the matter.

The environmental secretary of Para state suspended environmental licenses for Vale's Onca Puma nickel mine and Sossego copper mine this week, flagging irregularities with an annual environment report and "non-compliance" on mining mitigation efforts that it said resulted in conflicts with local communities.

Cutifani noted the furnace in Onca Puma had already been shut down and maintenance was scheduled for Sossego soon.

Vale shares rose as much as 2.75% on Friday, a day after the company reported a 35% drop in fourth-quarter net profit due to more taxable income and a higher provision tied to a 2015 dam collapse in the Samarco joint venture with BHP.

Vale executives told analysts the company expected to reach an agreement with authorities over the case in the first half of the year. The company's provision now stands at $4.21-billion.

"There has been some progress recently," said Chief Financial Officer Gustavo Pimenta.

Vale also said it plans to increase iron ore sales this year outside China, with demand expected to increase in Japan, Europe, India and Southeast Asia as supply tightens globally.