Brazil’s Vale posts US$4.8-bn profit in 2020

Brazilian mining company Vale posted a net profit of US$4.8 billion last year, though its bottom line continued to take a hit from the fallout of a 2019 dam collapse that killed 270 people.

Vale’s net profit for the fourth quarter, published late Thursday, came in at $739 million — down from $2.9 billion the quarter before, but up from a loss of $1.56 billion in the fourth quarter of 2019.

The 2019 collapse of a Vale mining waste dam in the town of Brumadinho in southeastern Brazil unleashed a deadly flood of toxic sludge and caused the company a net loss of $1.68 billion that year.

Vale is still paying the price: earlier this month, it announced it had agreed to pay $7 billion in damages to compensate victims and clean up the environment.

The company said its expenses related to the disaster were $4.85 billion for the fourth quarter of 2020.

But Vale, one of the world’s biggest iron-ore miners, said it got a boost from the recovery of international prices, fueled largely by demand from China.

“In the second half of 2020, prices strongly increased following global economy recoveries from (the) Covid-19 pandemic,” it said in a statement.

Vale also faces another front of controversy on the French Pacific island of New Caledonia, where pro-independence activists have launched violent protests to prevent the company from selling a nickel plant it operates to a French-backed consortium.

The unrest has forced Vale to halt operations there since December 10.

The firm said it was optimistic the sale would go through, but would “initiate the process to cocoon the asset into care and maintenance” if not.