Brazil state seeks $4.8 billion Vale asset freeze over dam disaster

Authorities from Brazil’s Minas Gerais state are seeking a freeze on nearly $5 billion in assets from miner Vale SA (VALE3.SA) as a partial payment to cover economic and other damages from last year’s deadly Brumadinho dam disaster.

In a statement on Wednesday, state and federal prosecutors in Minas Gerais said they had sent a joint petition seeking a judge’s order for Vale to freeze 26.7 billion reais ($4.78 billion) in assets for eventual restitution to the state.

The authorities are also seeking 28 billion reais ($5.01 billion) in collective “moral and social” damages. The petition calls for an immediate judgment against Vale.

The request is the latest in a series of legal actions taken against the company by state authorities since a mining waste dam burst in January 2019, unleashing an avalanche of mud that killed an estimated 270 people in Brumadinho city, burying many of them alive.

State judges granted prior requests to freeze assets made immediately following the mining disaster, the deadliest in Brazil’s history.

Vale said in a statement it had already provisioned 11 billion reais, between guarantees and deposits ordered by a judge. The company was not formally notified by authorities about the latest request, which is part of the same civil case opened in January 2019, it said.

The petition was signed by state prosecutors from Minas Gerais, Minas Gerais state itself, the state’s public defense office and the federal public prosecution office in Minas.

Earlier this year, the same state authorities filed criminal accusations against Vale executives including former Chief Executive Fabio Schvartsman. He was charged with knowing ahead of time about safety issues at the massive tailings dam and helping to hide them.

Vale shares were little changed in afternoon trading at 61.60, just off recent multi-month highs.

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