Vale Estimates $443 Million in Lost Cash Flow Next Year Due to Dam Break
December 01 2015 - 09:28AM
Dow Jones News
By Paul Kiernan
RIO DE JANEIRO--Brazilian mining giant Vale SA said Tuesday it
estimates $443 million in lost cash flow next year as a result of
the Nov. 5 dam failure at its joint venture, Samarco Mineração
SA.
The figure doesn't include damages Vale may have to pay as a
result of legal actions--such as a $5.2 billion civil lawsuit filed
Monday by the Brazilian government--against Samarco, Vale and its
joint-venture partner, BHP Billiton Ltd, following the
accident.
Instead, Vale said most of the immediate impact will come
through lost production. The avalanche of mud released by the
collapsed tailings dam knocked out a conveyor belt at Vale's nearby
Fabrica Nova mine, effectively shutting down 9 million metric tons
of iron-ore production and costing an estimated $485 million in
lost revenue.
Vale also expects to lose $58 million in iron-ore sales to
Samarco and $55 million in dividends from the joint venture, which
had its operating license yanked shortly after the incident.
Avoided production costs are expected to offset the revenue
losses by $155 million.
Write to Paul Kiernan at paul.kiernan@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
December 01, 2015 09:13 ET (14:13 GMT)
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