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Brazil & Southern Cone - May 2019

Economic Highlights

Vale’s negative quarter: On 9 May, Brazilian mining giant Vale released its financial performance report for the first quarter of 2019, in which it reported net losses of US$1.64bn over that period. The company also reported its first ever negative Ebitda (adjusted earnings before interest, taxes depreciation, and amortization) totalling a negative of US$652m. These results are a direct consequence of the rupture of a tailings dam at an iron ore mine in Brumadinho, Minas Gerais state, last January. According to Vale’s performance report, the dam rupture’s financial impact for the company is estimated at US$4.95bn, a combination of provisions for compensation programmes, the cost of decommissioning other upstream dams in Brazil, lost volumes, and direct expenses incurred by the collapse (such as sanctions).

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