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Vale still suffering from the effects of two dam collapses

Christian Fernsby |
Rio-based miner Vale said on Wednesday, July 31st, it swung to a quarterly loss as the company announced more thaUS$2 (R$7.6) billion in fresh writedowns related to two deadly dam bursts (Mariana and Brumadhino disasters) suffered by the company over a period of fewer than four years.

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The world’s largest iron ore exporter reported a second-quarter net loss of US$133 million after a year-ago profit of US$76 million, compared to the forecast of US$2.84 billion.

Revenue rose 6.6 percent from a year earlier to US$9.19 billion, shy of a forecast of US$9.59 billion, lifted by higher iron ore prices, offset by declining nickel and copper prices.

The company’s newly installed Chief Executive Eduardo Bartolomeo said in a statement that Vale’s key priority, in addition to beefing up safety efforts, was to “reduce uncertainties” and “deliver sustainable results.”

“The bottom line is that we view today’s results as another weak quarter, though we are encouraged by Vale’s plans to restart additional iron ore capacity,” Clarksons Platou Securities analyst Scott Schier said in a research note, adding that he expected its shares to fall slightly as a result.

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