Vale cancels plans for mining on indigenous lands

Vale will abstain from developing mining activities on Brazil's indigenous lands, a move experts think owes to attempts to repair its corporate image.

The company will withdraw all 71 requests it filed to conduct surveys and develop the mining potential of these areas, a company spokesperson told BNamericas.

The Bolsonaro administration plans to open indigenous lands to mining, oil, gas, electric power and agriculture companies, which led to a backlash from global environmental groups.

Pedro Galdi, an analyst at Mirae Asset Management, told BNamericas that "at this point, the main strategy of Vale is to avoid any controversial issue."

Vale's reputation has deteriorated since its tailings dam collapsed in January last year in Brumadinho, Minas Gerais state. The disaster is the worst in Brazil's history, killing at least 259. The miner is still paying compensation to victims' families.

Abandoning plans for the indigenous areas will also reduce costs as the economic crisis stemming from coronavirus begins to bite. Vale already cut 2020 capex because of the pandemic.

TIMBOPEBA MINE

Prosecutors denied they reached an agreement that would have allowed Vale to resume operations at the Timbopeba mine in Minas Gerais state.

Vale planned to start dry processing operations this week, boosting monthly production by about 330,000t, but prosecutors deem conditions at the mine still unsafe.

Operations were suspended by court order in March last year, in the aftermath of the Brumadinho dam collapse.