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Vale net income down in latest quarter due to deadly dam collapse in Brazil

Miner reached a multi-billion dollar settlement with the Brazillian government in March 
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Vale's net income was down by $670 million in the second quarter of 2016, compared to the year's first quarter, due mainly to the $1-billion fallout from the Bento Rodrigues dam disaster in Brazil. File photo.

Vale's net income was down by $670 million in the second quarter of 2016, compared to the year's first quarter, due mainly to the $1-billion fallout from the Bento Rodrigues dam disaster in Brazil, the company said in a note to investors.

The company said “Samarco-related provisions” resulted in a second quarter net income of $1.1 billion, compared $1.7 billion in the previous quarter.

On Nov. 5, 2015 the Bento Rodrigues tailings dam, owned by Samarco – a joint venture between Vale and BHP Billiton – suffered a catastrophic failure that flooded a subdistrict of Mariana, Brazil.

The flooding resulted in at least 17 deaths and injured at least 16 more people, according to media reports. 

Vale and BHP Billiton reached a multi-billion dollar settlement with the Brazilian government over the Samarco dam collapse in March 2016.

The company said in its note to investors nickel sales revenues totalled $710 million in the second quarter, up $60 million from the previous quarter.

Copper sales for the quarter were $443 million, up $8 million from the previous quarter.

The price of nickel has seen a recent increase to $4.7 per pound, compared to a low of just over $3.4 per pound over the previous six months.

“While we welcome any relief when it comes to commodity prices, our objective is to be competitive in all market cycles,” said Angie Robson, manager of corporate and Aboriginal affairs for Vale's Ontario operations, in an email to Sudbury.com.

“As market conditions continue to be challenging, our focus remains on containing costs and operating as safely and efficiently as we can.”


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