De-characterization Program - ESG
Upstream Dam De-characterization Program in Brazil
Vale's priority is the safety of people and communities downstream of its operations, as well as the safety of all its structures. In this sense, one of the company's main initiatives is the Upstream Dam De-Characterization Program, which covers all our 30 dams, dikes, and drained piles in Brazil with upstream heightening method.
Under the upstream heightening method, the body of the geotechnical structure is built from the thick tailings deposited in the reservoir, by successive stratification and in the opposite direction to the flow of water (upstream). This is the same construction method used on the collapsed dam in Brumadinho.
What is de-characterization?
The term ‘‘de-characterization’’ means to functionally reintegrate the structure and its contents into the environment, so that the structure no longer serves its primary purpose of acting as a tailings containment. Laws and regulations approved in Brazil following the rupture of Brumadinho dam require the de-characterization in all our upstream dams on a specified timetable. Due to the technical complexity involved in the de-characterization works and the necessary actions to increase safety of the structures, in February 2022, we have entered into a term of commitment with the state of Minas Gerais, regulatory agencies and state and federal public prosecutors, establishing a new schedule and reinforcing the commitment to eliminate all its upstream structures in Brazil. We are still determining the appropriate measures for the de-characterization of certain upstream dams in Brazil.
The de-characterization of an upstream structure is a complex process, with specific challenges for each structure that, if left untreated, can affect the conditions of geotechnical stability, and increase the risk of the works. Therefore, de-characterization requires time, intensive care with safety and customized solutions. The de-characterization projects include detailed engineering studies for each structure included in the program, with reinforcement works when applicable.
For the B3/B4, Forquilha III and Sul Superior dams, structures in critical safety conditions, Vale built downstream containment structures (ECJ) with the purpose of retaining tailings in case of rupture of the structure. It should be highlighted that the ECJ for Forquilha III was designed considering a hypothetical scenario of simultaneous failure of the Forquilha I, Forquilha II, Forquilha III and Forquilha IV dams. In addition, was completed in 2022 for the Minervino and Cordão Nova Vista dikes, in the Pontal Dam, currently at Emergency Level 1.
To reduce human exposure to risks, Vale has been carrying out works to de-characterize the B3/B4 and Sul Superior dams with remotely controlled equipment. Finally, it is important to note that all of the company's dams undergo routine field inspections and are permanently monitored by Vale's Geotechnical Monitoring Center (CMG), including those that are part of the De-characterization Program.
Among the 30 structures contemplated, 12 had works completed up to now. The de-characterized are:
The company expects to complete its Upstream Dam De-Characterization Program in Brazil by 2035, according to the synthetic schedule below.
Schedule of the Upstream Dams De-characterization Program in Brazil
1 B3/B4: Due to a higher-than-expected productivity achieved with semi-autonomous equipment, the tailings conditions, and the low impact of operations on the dam stability observed so far, in addition to a reduction in the volume of tailings to be removed, as a result of advances in engineering studies, there is a tendency of anticipation for 2025.
2 Campo Grande: Due to the need to implement instruments, soundings and complementary engineering studies, the date of Campo Grande de-characterization conclusion changed from 2025 to 2026.
Elimination of Upstream Dams per Year (unit)
*Despite the change in the Campo Grande dam de-characterization deadline, the company maintains the commitment to de-characterize 18 structures of the program by 2025 due to the tendency to anticipate the completion of the B3/B4 dam works
Vale emphasizes that the deadlines proposed above are based on the best information and techniques available at the time. They can be adjusted based on a relevant fact or condition that appears, in particular, related to the safety of the de-characterization process.
Resources for the de-characterization of upstream dams
Vale's Upstream Dam De-Characterization Program has provisions recorded, as regularly disclosed in the Company's Financial Statements. As of December 31, 2021, Vale recorded:
- An increase of US$ 1.7 billion in provisions, based on updated estimates for the overall cost of projects, which considered new engineering and geotechnical solutions, new risk management concepts, the use of remotely operated equipment and improvement of containment plans for certain dams.
- A provision balance for the Program of US$ 3.523 billion, which excludes disbursements, exchange rate adjustments and present value accumulated in US$ 1.443 billion since 2019.
In compliance with the Term of Commitment for De-characterization signed with the main regulators and the Public Ministry, Vale makes available the monitoring reports on the execution of the de-characterization works of its upstream dams: