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The document, published in the Brazilian official gazette on Monday February 18, showed that 84 dams currently operate through the upstream method, or an ‘unidentified’ one, and all need to be disabled when the decommissioning begins on August 15, 2021.
All miners are obligated to prepare technical projects on the decommissioning of upstream dams that should include fortifying the structures through downstream methods by August 15, 2019, ANM said. Dams will have to be reinforced until the same date in 2020, ANM added.
Additionally, the authority forbid mining companies from building any structures that require constant human presence in the direct path from a tailings dam in case its contents rupture and flood. Emergency sirens will be constructed out of the way of a potential accident as well.
The regulation tightening comes after the failure of an upstream dam at Vale’s Córrego do Feijão mine on January 25. There are 166 people known to have died in the disaster and the civil defense authority in the state of Minas Gerais is still looking for 145 more that are missing.
Vale is the largest and most important miner in Brazil in revenues, exports and contribution to gross domestic product as well as the world’s biggest iron ore producer.
Following the breach of the dam, Vale decided by itself to decommission all of the upstream structures it operates for the disposal of waste material from iron ore production. This process will require the halt of mines linked to the dams, which could cut annual production by 40 million tonnes over three years.
The decision from the Minas Gerais environmental regulator SEMAD to cancel the permit for another dam, serving the Brucutu mine, could also cut production by about 30 million tonnes per year. Although, this dam is a downstream one.
Iron ore prices are on the rise amid the seaborne supply disruption. Fastmarkets’ MB 62% Fe Iron Ore index was at $88.32 per tonne cfr delivered to Qingdao, China, on February 18, up by 18.25% from $74.69 per tonne on January 25, the day of the accident at Vale.
Although Vale had reports from third parties that guaranteed the safety of the dam that failed at the Feijão mine, the structure was considered to have a high potential for damage if it ruptured; and it’s not alone, there are 218 more dams in a similar situation, ANM said.
The high number of fatalities by the accident was, in part, due to a lunch and dining room being located in the path of the tailings flood in case of a breach. Emergency sirens were also in the way of the spill and therefore were engulfed by the waste material before activation.
“There will be a much higher scrutiny and reinforcement of rules regarding tailings dams in the country, without a doubt,” a well-known lawyer for the mining industry told Fastmarkets, adding that “until deteriorated sentiment improves, there’s an increased probability of licensing being halted. But the mining sector will emerge stronger from this episode.”