Brazilian mining CEO steps down amid anger over dam collapse

The boss of the Brazilian iron ore mining firm Vale has resigned, following growing public and political anger over the collapse of a dam in which at least 186 people died.

Fabio Schvartsman and several other senior executives resigned on a “temporary” basis on Saturday after prosecutors recommended their dismissal. The move came after a leak of official documents suggested that Vale knew the dam was at a heightened risk of collapse.

In addition to the confirmed death toll, 122 people are still missing more than a month after the accident at the dam, which collected waste from an iron ore mine near the town of Brumadinho in Minas Gerais state.

It was the second deadly burst at a Vale-linked tailings dam in Minas Gerais in four years. In 2015, an accident near the town of Mariana killed 19 people and led to Brazil’s worst-ever environmental catastrophe. Schvartsman started his term as Vale CEO in 2017 with the motto: “Mariana, never again.”

The Brazilian newspaper Folha de S Paulo reported that a Vale manager had told executives the integrity of the dam had worsened, although the company vigorously denied the report.

In a letter to Vale’s board, Schvartsman said: “Even totally assured of my righteous ways and having fulfilled my duty, I request the board to accept my temporary leave in the benefit of the company’s continued operations.” He will be replaced by Eduardo Bartolomeo, an executive director, as the interim CEO.

Vale’s head of ferrous minerals and coal, Peter Poppinga, its planning director, Lucio Flavio Gallon Cavalli, and the regional director Silmar Magalhães Silva also resigned. Vale said its board met on Friday night and Saturday morning following the prosecutors’ recommendation.

Last month, Brazilian police arrested eight Vale employees accused of covering up weaknesses at the dam. The arrests and search warrants targeted employees of Vale as well as employees of German auditing firm TÜV SÜD, which had certified the dam as stable.

Brazil’s mining authorities have started an inquiry into Vale over a possible cover-up regarding safety procedures, which could lead to a fine of up to 20% of its 2018 gross revenue. The maximum penalty could be around 25bn reals (£5bn), based on estimates of preliminary 2018 data.

“The law is clear in punishing companies if they are found to have colluded to prevent proper government monitoring,” Brazil’s mining secretary, Alexandre Vidigal de Oliveira, told Bloomberg. “I’ve requested the start of the probe and now the mining agency has 180 days to present some conclusions.”