Brazil evacuates towns near Vale, ArcelorMittal dams on fears of collapse

The collapse two weeks ago unleashed an avalanche of mud that engulfed nearby buildings and farms, killing an estimated 300 people in Brazil’s deadliest mining disaster.

As evidence mounted that Vale missed warnings of trouble at the dam in the town of Brumadinho, pressure has risen on the firm and other mining companies to bolster safety measures to avoid a recurrence.

Vale shares were down 1.9 percent in morning trading to an 11-month low of 40.87 reais. ArcelorMittal shares dropped nearly 5 percent at 19.26 euros.

Another dam, also used to store the muddy mining detritus known as tailings and co-owned by Vale and BHP Group, had collapsed in 2015, killing 19 people and wreaking massive environmental damage.

Vale said Brazil’s mining agency ordered the evacuation of about 500 people from a dam area at its Gongo Soco mine on Friday as a preventive measure after engineering consultancy Walm said a certificate guaranteeing stability conditions had not been issued for the dam.

Walm could not be reached immediately for comment.

Local firefighters sounded evacuation sirens early on Friday, warning residents to flee because of signs of instability in the dam.

Vale said it has intensified inspections in the area and was installing equipment to detect vibrations and bringing in international consultants to assess the situation.

Separately, ArcelorMittal said it ordered the evacuation of about 200 people near its dam by the town of Itatiaiuçu, about 40 km (25 miles) from Brumadinho, after consulting with local authorities.

The decision came after the steelmaker said it adopted more rigorous inspection criteria in the aftermath of the Brumadinho disaster. A barrier stores tailings from the company’s Serra Azul dam, with an output of 1.2 million tonnes of iron ore concentrate and pellets.

“We will try to return people to their houses as quickly as possible, even though it’s not possible to say when that will be,” ArcelorMittal Brazil Chief Executive Officer Benjamin Baptista said in a statement.

At the Vale mine 500 inhabitants from Barão de Cocais were taken to a gym nearby, the municipality said on its Facebook page. Like the collapsed dams Brumadinho and Mariana, co-owned by Vale and BHP, the evacuated dams are in the Brazilian state of Minas Gerais, traditionally its mining heartland.

Also on Friday, authorities closed a port terminal operated by Vale in Vitoria, in the southeastern state of Espirito Santo, due to pollution problems.

The municipality of Vitoria said on Thursday it had fined the company 35 million reais ($9.5 million) for throwing mining residues in the sea. Vale said it would take appropriate measures but added that recent inspections by local authorities had not detected any problems.

In the wake of the Brumadinho mining disaster, the state of Minas Gerais cancelled Vale’s license to operate another dam and a mine in the state.

On Tuesday Vale declared force majeure on some iron ore contracts after a court-ordered halt to a mine responsible for nearly 9 percent of its output following the disaster.