Brazil to shut down upstream tailings dams by 2021

Brazil's national mining agency has asked mining companies to shut down all 84 upstream tailings dams in the country by 15 August 2021, as it takes steps to bolster mining safety after a tailings dam accident at Vale's Feijao iron ore mine on 25 January killed over 150 people with several still missing.

Tailings dams are reservoirs to hold mining waste and water. Several of these structures are quite dated and decades old. These dams pose a significant threat to life when they are built upstream from inhabited areas.

Brazil is among the leading producers and exporters of iron ore. Vale, CSN, Usiminas, Trafigura, MMX, ArcelorMittal and Anglo American are among the major producers.

Brazil's largest mining company Vale has set a one- to three-year deadline to shut down its 10 existing tailings dam, which will affect 40mn t/yr of iron ore output. Of this, two mines — Feijao and the Vargem Grande complex — with around 20mn t/yr of capacity have already been closed as dams are decommissioned.

The country has also banned the construction of all new upstream tailings dams, while existing mines will have to implement solutions to reduce water flow in these dams by 15 August this year to minimise risks to human life in the event of a breach.

Brazil's move is unlikely to have much impact on iron ore prices since it provides ample time for companies to decommission upstream dams.