Control and Management of Dams

Financial Indicators

In 2016, Vale invested US$ 31 million in improvements aimed at management of dams and reinforced its commitment to mitigate the consequences of the Fundão Dam rupture.

In 2017, Vale invested approximately US$ 56 million in maintenance, monitoring, improvement works, audits, risk analysis, revisions of the Emergency Action Plan for Mining Dams (PAEBM) and implementation of warning systems, among others.

In 2018, Vale developed new management plans, including the de-characterization of upstream dams with investments totaling US$ 61 million.

In 2019, investments in dam management reached US$ 102 million, an increase of 67% compared to 2018. Investments in dam management encompass: dam maintenance, monitoring, safety and operational improvements, audits and risk analysis, revisions of the Emergency Action Plan for Mining Dams (PAEBM) and warning systems, video monitoring and instrumentation.

Investments in dam management

(In US$ million)

Goals and Time Frames

Vale is committed to continuously increase the efficiency of processes and keep its dam management in permanent alignment with updated international practices whose standards exceed local legal requirements.

Goals

Management

Dam management initiatives

Since the dam failure in Brumadinho, analysis processes were intensified in order to support the taking of preventive and corrective actions in all of Vale’s structures, among them:

Safety and operational excellence are key elements throughout the organization

Tailings dam risk management: Three lines of defense

The updated governance and lines of defense increase the flow of information within the company, enabling risk-related information to reach upper management.

External Review

Vale conducts reviews by external and independent companies periodically, to certify the dams’ physical and hydraulic safety conditions. These reviews also aim to meet the legal requirements provided in Brazilian standards and agreements signed with agencies, such as the Public Prosecutor – MP and National Mining Agency – ANM. 

Currently, the main reviews are:

Regular Safety Inspection Report – RISR

• In compliance with Federal Law (Norm DNPM 70.389/17).
• Frequency: two times per year, in March and September.
• Results: analysis of the stability condition, issuance of the Stability Condition Statement (DCE-Declaração de Condição de Estabilidade).

Vale structured the audit procedure RISR as in the timeline below, which is repeated every six months:

Independent Audit

• Audits are performed by international independent companies
• In response to the Public Prosecution Office requirements, sending reports periodically
• Monitoring of dam stability by the auditing company for 12 months after completing the works of reinforcement, when applicable.

Engineer of Record

Vale is also proceeding with improvements on its risk management practices and, in January 2020, the Engineer of Record (EoR) role was implemented as an additonal step to strengthen the governance of its Tailing Management System

The EoR is responsible for carrying out a regular dam safety inspection, as well as the issuance of monthly technical reports, continuously interpreting the results of the inspection activities and monitoring the structures.

The EoR is external to operations and is integrated with Vale's lines of defense and to senior management level, in order to act with the authority required for this type of role. In this model of a continuous supervision, more rigorous, if a change in the stability of any structure is identified, a new Stability Condition Declaration (“DCE”) may be issued at any moment of the year. In fact, the EoR’s focus is the continuous management of dam safety and the DCE becomes a consequence of this process.

The adoption of the EOR is a good practice recommended by the Mining Association of Canada - MAC, the Canadian Dam Association- CDA and by the Extraordinary Independent Investigation Committee. It aims to provide further reliability and quality to the process of monitoring and reviewing the safety of dams.

For more information about Vale’s structures go to Emergency Levels at the dams.

Risks

In the Ferrous area, Vale’s Integrated Risk Management System for geotechnical structures is based on three main pillars: People, Processes and Information Systems.

The Geotechnical Monitoring Center in Nova Lima, Minas Gerais, which was implemented in February 2019, is responsible for monitoring 24 hours, seven days a week to ensure the correct information to support an informed, fast and secure decision-making process. In October 2019, the CMG was implemented in ITABIRA, Minas Gerais.

Vale invested in new dam monitoring technologies:

Emergency Levels at the dams:

Emergency situations are considered those arising from adverse events that affect the dam safety and may cause damage to its structural and operational integrity, preservation of life, health, property and environment. The emergency should be assessed and classified according to the levels below:

Level of Emergency	Detailment	Comunication
Level 1	When an anomaly is detected that results in the maximum conservation status score or any other situation with potential compromise of safety of the structure, which requires special (daily) inspections.	National Mining Agency, Environmental bodies of the National, State and Municipal Civil Defense.
Level 2	When the result of actions adopted in the anomaly referred to on level 1 is classified as “not controlled” or “not extinct”, requiring new especial inspections and interventions.	National Mining Agency, Environmental bodies of the National, State and Municipal Civil Defense, Self-Rescue Zones, Secondary Safety Zone.
Level 3	Imminent rupture situation or already occurring.	National Mining Agency, Environmental bodies of the National, State and Municipal Civil Defense, Self-Rescue Zones, Secondary Safety Zone.

Level 1

Detailment:
When an anomaly is detected that results in the maximum conservation status score or any other situation with potential compromise of safety of the structure, which requires special (daily) inspections.

Comunication:
National Mining Agency, Environmental bodies of the National, State and Municipal Civil Defense.

Level 2

Detailment:
When the result of actions adopted in the anomaly referred to on level 1 is classified as “not controlled” or “not extinct”, requiring new especial inspections and interventions.

Comunication:
National Mining Agency, Environmental bodies of the National, State and Municipal Civil Defense, Self-Rescue Zones, Secondary Safety Zone.

Level 3

Detailment:
Imminent rupture situation or already occurring.

Comunication:
National Mining Agency, Environmental bodies of the National, State and Municipal Civil Defense, Self-Rescue Zones, Secondary Safety Zone.

Vale’s structures

See Vale’s actions according to the safety level of the dams:

Level 1

Indication of instability. Monitoring is intensified.
Dams: Barragem VI, Capim Branco, Campo Grande, Captação de Água¹, Dique B, Forquilha IV, Itabiruçu², Maravilhas II, Marés I, Marés II, Menezes II, Norte/Laranjeiras, Peneirinha, Xingu, Santana, Sistema 5 (MAC), Sistema Pontal, Vargem Grande, Borrachudo II Dike, Taquaras Dam, Dicão Leste Dam, 6, 7A, Area IX, Barragem 5, Paracatu Dike, Patrimônio Dike

Level 2

Evacuation of all the people from the Self-Rescue Zone is required.
Dams: Capitão do Mato, Doutor, Forquilha II, Grupo e Sul Inferior

Level 3

Care is extended to people in the Secondary Rescue Zone through additional educational measures.
Dams: B3/B4, Forquilha I, Forquilha III e Sul Superior

¹ Single Base Metals structure with a negative DCE.
² The Itabiruçu dam is at emergency level 1, but has a positive DCE.

Emergency Action Plan for Mining Dams (PAEBM)

In order to deal with the emergency situations described above, Vale uses the PAEBM, which is a technical document that is part of the Dam Safety Plan – PSB and aims to:

• Minimize the loss of lives, social, economic, and environmental impacts
• Identify and classify various situations and/or events that may endanger the dam’s structural integrity and establish emergency actions
• Inform the flow of communication with the many agents involved

The PAEBM is registered in the Town Halls, Local, State and Federal Civil Defense, and in 2020, it will be revised and filed in the environmental institutuions of Minas Gerais.

Content of PAEBM

Community engagement:

• Carry out drills with communities
• Partnership with the Civil Defense Agency so that residents living near dams know how to respond to emergencies, registration and activation meetings
• Sound alarm systems
• Open channel with the community for questions and clarifications about the PAEBM

Stakeholders involved:

Entrepreneur

Private or governmental agent who uses the dam for their own benefit or collectivity.

Technician in charge

Technician in charge, professionally qualified for project, construction, operation maintenance or monitoring of dams.

PAEBM Coordinator

Agent named by the entrepreneur that is responsible for coordinating the described actions in the PAEBM, being available to act promptly on emergency dam situations.

Dam Safety Team

Professional team responsible for dam safety actions, which may be comprised by professionals from the entrepreneur’s own staff or hired specifically for this purpose.

External agents

Public authorities responsible for inspection, dam safety management and emergency actions.

Geotechnical Monitoring Center

Entrepreneur staff that supervises the dam and carries out the actions previously established in emergency situations.

Population:

ZAS

Self-rescue Zone (ZAS) is the region downstream of the dam where it is considered that here is not enough time for intervention by the competent authorities in an emergency situation. Comprises the region up to 10 km or 30 minutes from the dam's breaking point.

ZSS

Secondary Safety Zone (ZSS) is the constant region of the Flood Map, not defined as ZAS.

Expected Actions Flow - PAEBM:

New Standard on Tailings Management

Vale is focused on the evolution of its Tailings Management System (TMS) for the Ferrous, Coal and Base Metals businesses. During 2019 and 2020, Vale worked closely with the International Council on Mining and Metals (ICMM) and participated actively in the Global Industry Standard on Tailings Management (GISTM) – an effort whose purpose is to improve safety through all phases of the tailings storage facilities life-cycle.
As a member of ICMM, Vale considers that the focus and immediate priority should be to ensure the full implementation of the GISTM, and all its tailing facilities will be in conformity within the defined timelines.
Vale has been working on its Tailings Management System (TMS) before the GISTM launch. The adhesion between Vale’s TMS and the GISTM is very high and once completed all principles and recommendations from the GISTM will be addressed. Please find below the ongoing initiatives Vale is working on to support the GISTM implementation:

Organizational structure, qualification and requirements, EoR (Engineer on Record), risk assessments, policies and processes

Cultural transformation as a key element in the management process

Formalization of key normative documents and standardization

Public Disclosure, transparency and information dissemination

Vale is currently conducting its first internal assessment for each Business based on the GISTM requirements, which will be completed by the end of 2020. After this evaluation, senior management will perform a critical analysis and create an action plan to address the identified gaps.
Vale reiterates its commitment to safety, transparency and the adoption of the known best practices for managing its tailings facilities.

Decharacterization of upstream structures

One of the main milestones to reduce the company's risk level is the de-characterization of all its upstream structures. Vale has already started this process, which will continue in the coming years. The first de-characterization, of the 8B dam, was completed in December 2019. The de-characterized structures will be reintegrated into the environment, seeking to guarantee environmental performance compatible with the territory in which they are located.

To allow de-characterization works under safer conditions and to increase safety in areas downstream of dams, in specific cases, Vale is building containment structures, or back-up dams. The construction of the first back-up dam for the Sul Superior dam, in the municipality of Barão de Cocais, was completed in early 2020. The completion of the back-up dam of the B3 / B4 dam is expected by 2H20, while the back-up dam of the Forquilhas and Grupo dams is expected by 1H21.

Some of Vale's dams have smaller internal dikes, which were also built using the upstream method and, therefore, will also be de-characterized. Finally, under the terms of the National Mining Agency’s Resolution nº 13/19, dated August 2019, which extended the legal obligations applicable to upstream dams for drained stacking structures, two² of these structures were also included in the de-characterization plan.

The de-characterization plan for upstream structures was updated in September 2020, based on information and studies on the company's structures, which are continuously updated. The plan considers 29 geotechnical structures, comprising: 14 dams, of which 1 (8B) was already de-characterized; 13 dikes, of which 2 (2 Kalunga and 3 Kalunga) was already de-characterized; and 2 drained stacks.

Vale has provisioned U$$ 2.0 billion for the de-characterization of upstream dams and other structures in 1Q19 and 2Q19, and has provisioned additional US$ 671 million in 4Q19. Originally, three structures were framed. With the reclassification of the Xingu drained stack as a dam in September 2020, based on updated studies and information, this number has been reduced to two.

¹ Xingu was reclassified in September 2020, based on updated studies and information. Originally, its classification was drained stack.
² Originally, three structures were framed. With the reclassification of the Xingu drained stack as a dam in September 2020, based on updated studies and information, this number has been reduced to two.
³ DP is the acronym for Drained Pile