Settlement worth $55.9 million to end lawsuit against Vale in U.S.
In a statement to the market released this week, Vale announced it has reached an agreement to settle a lawsuit in the United States related to the tragedy that occurred in Brumadinho, Minas Gerais state, in Brazil. The mining company will face payments totaling $55.9 million dollars, but it will have the possibility to refute the charges.
According to the statement, the settlement will go into effect as soon as it is ratified by the United States District Court for the Eastern District of New York.
The lawsuit had been pending since April 2022 and was filed by the Securities and Exchange Commission (SEC). This is the agency responsible for regulating the stock market in the United States. Vale was accused of misleading investors about the safety of its dams between 2016 and 2019, leaving them without adequate information to make risk assessments.
SEC stated that audits have been manipulated so that fraudulent certificates of stability could be issued, hiding the real situation of several structures, including the one that broke in Brumadinho, in January 2019, causing 270 deaths and environmental and social damage in several municipalities in the Paraopeba River Basin. As stated in the lawsuit, following the tragedy, the mining company lost more than $4 billion in its market capitalization, generating losses for those who had purchased its bonds.
"For years, Vale knew that the Brumadinho dam, built to contain potentially toxic byproducts from mining operations, did not meet internationally recognized standards for dam safety. Yet Vale's public sustainability reports and other public filings fraudulently assured investors that the company had adhered to the 'strictest international practices' in assessing dam safety and that 100 percent of its dams were certified as stable," SEC reported in filing the suit.
From the beginning, the mining company has denied the accusations and said it is committed to repairing the damage. "Vale remains committed to remediating and repairing the damage caused by the Brumadinho dam breach in 2019," it reiterated in its statement to the market.
