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Brazil mining disaster could cost Vale 75 million tonnes in 2019 sales - CFO

Brazil mining disaster could cost Vale 75 million tonnes in 2019 sales - CFO
FILE PHOTO: Members of a rescue team search for victims of a collapsed tailings dam owned by Brazilian mining company Vale SA, in Brumadinho, Brazil February 10, 2019. REUTERS/Washington Alves/File Photo Copyright Washington Alves(Reuters)
Copyright Washington Alves(Reuters)
By Reuters
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RIO DE JANEIRO (Reuters) - Brazilian miner Vale SA's sales of iron ore could be reduced by as much as 75 million tonnes this year as a result of the deadly dam collapse in the town of Brumadinho two months ago, its chief financial officer said on Thursday.

Luciano Siani said in a call to analysts and investors that under the most optimistic scenario, the loss of sales would be around 50 million tonnes.

While representing a substantial decrease from the company's 382 million tonne sales forecast for this year, also disclosed on Thursday, the worst-case sales outlook would still leave 2019 sales at 307 million tonnes.

That is just slightly below the company's 2018 sales volume of 309 million tonnes.

Siani opened the call by expressing condolences to the families of the victims of the dam burst, which killed an estimated 300 people, many of them Vale employees.

He also said the company is focussing on safety and cleanup measures, not on boosting production, after the massive spill of muddy mining detritus, which also contaminated a nearby river.

Siani expressed confidence that a deal will be reached with authorities in the coming weeks on restarting Brucutu, one of its largest mines in the state of Minas Gerais, where both the January dam burst and another similar one in 2015 happened.

In a reminder of the continued tense atmosphere in the state, Vale on Wednesday night activated alarms in areas below three tailings dams due to an elevated risk of rupture.

In addition to setting many communities on edge, the disaster has also taken a toll on Brazil's economy, Brazil's Central Bank said on Thursday, citing the collapse as one of the factors behind a reduction in its 2019 gross domestic product growth estimate.

(Reporting By Marta Nogueira; Editing by Chizu Nomiyama and Steve Orlofsky)

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