Anger mounts at Vale in Brazil town at risk for new dam burst

Credit: REUTERS/Denis Balibouse

By Leonardo Benassatto

BARAO DE COCAIS, Brazil, May 24 (Reuters) - It was bad enough for Paulo de Morais when he was expelled in early February from the house where he lived for 22 years, in the shadow of a mining dam at risk of collapse.

De Morais was evacuated with about 450 of his neighbors under orders from Brazil's mining agency, which feared a repeat of the catastrophe at Brumadinho 65 kilometers (40 miles) away. A dam collapse there in late January unleashed a wave of toxic mud that buried alive more than 240 Vale SA VALE3.SA employees and neighbors.

"From one day to the next everything changed," said Morais, who lived with his wife and two children in a red house he built himself just behind a 300-year-old church in the now-abandoned Brazilian community of Socorro.

"Suddenly within five minutes we were ripped out by Vale. Ripped out, expelled from our homes," he said, leaning against a shack on a coffee farm where he moved after the evacuation.

Morais now fears he will lose that home too.

A likely landslide in a pit at Vale's Gongo Soco mine in the coming days has raised the risk of destabilizing the adjacent dam, which could unleash a torrent of toxic mud if it collapses, devastating the colonial town of Barao de Cocais.

The town, which includes the abandoned district of Socorro, sits along the so-called Royal Road, once used to transport gold to the coast from mines in the state of Minas Gerais, now best known for its iron ore production.

The main town is 15 km (9.3 miles) from Socorro but a study by Vale this week said it and two other villages would be in the path of the mud flow if the dam breaks, forcing the evacuation of some 10,000 people, according to press reports.

Residents are on edge, with the local economy paralyzed as few are willing to make any bets on the future.

"People don't want to hire anyone without knowing what's going to happen from one day to the next," said Eric Pastor, a local business representative. "They don't know if they'll have their homes tomorrow, so their dreams are on hold."

The Minas Gerais environment secretary estimated this week that the dam had a 10-15% chance of collapsing.

Vale says it is committed to residents' safety and is monitoring the Sul Superior dam and the nearby mining pit.

The miner has said it is unclear if a landslide in the mining pit would trigger a collapse, but it said last Saturday it was building a concrete structure 6 km (4 miles) downstream to contain fallout from a potential dam break.

Vale is also building a canal to redirect some of the potential mud flow, which Morais fears will cleave through his 18-hectare (44.5 acres)farm, sitting between Socorro and the main town, where horses, cattle and sheep graze.

"If Vale comes here and tells me that I also need to leave this land, I don't know if I can bear it," he said.

(Reporting by Leonardo Benassatto; Additional reporting By Christian Plumb; Editing by Dan Grebler)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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