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Vale workers arrested as death toll climbs after dam collapse at Brazil mine

Key Points
  • The death toll from dam collapse at Vale's Corrego do Feijao in southeastern Brazil climbs to 65.
  • Three Vale employees and two contractors are arrested as Minas Gerais state issues warrants on suspicions of murder and falsification of documents.
  • Vale's stock price ticks higher after collapsing over the previous two sessions.
Residents are seen in an area next to a dam owned by Brazilian miner Vale SA that burst, in Brumadinho, Brazil January 25, 2019.
Washington Alves | Reuters

Mining giant Vale on Tuesday confirmed the arrest of several employees as the death toll continued to climb after a dam collapsed at a company-owned mine in southeastern Brazil.

The Brazilian company is facing criminal charges and pressure to overhaul its management following the deadly dam breach at its Corrego do Feijao mine near the city of Brumadinho. The number of confirmed dead now stands at 65, and authorities fear the casualties could climb above 300.

Despite the flurry of negative headlines, Vale's U.S-listed shares traded up about 4 percent Tuesday. The price collapsed by nearly 25 percent between Friday and Monday, following several cautious stock downgrades by investment banks.

Three Vale employees and two contractors have now been arrested, according to Reuters, which saw the court order. Investigators in Minas Gerais state, where the incident occurred, have issued arrest and search warrants on suspicion of murder, falsification of documents and environmental crimes.

The employees include two senior managers at the mine, where a dam collapsed on Friday, spilling a river of sludge containing mining byproducts into the surrounding area. Reuters reports that authorities in Sao Paulo arrested two engineers accused of attesting to the dam's safety.

German consultancy TUEV SUED confirmed to Reuters that the engineers are employed by the company and had carried out inspections on the dam on behalf of Vale. Vale acknowledged the warrants on Tuesday without offering further details.

"With regards to the warrants served this morning, Vale informs that it is fully cooperating with the authorities," Vale said in a statement. "Vale will continue to support the investigations in order to determine the facts, in addition to the unconditional support to the families."

Brazil's Prosecutor General Raquel Dodge on Monday said the country intends to pursue criminal charges against Vale executives, Dow Jones reported. The government will also inspect about 140 of the nation's dams that hold back so-called tailing ponds, where byproducts from mines are stored.

The Corrego do Feijao incident is the second time one of the company's dams has collapsed in just over three years. In 2015, a breach at a tailing pond at the Samarco mine jointly owned by Vale and BHP Billiton, also in Minas Gerais, caused Brazil's worst environmental disaster and killed 19 people.

On Monday, Brazilian Vice President Hamilton Mourao said the government is considering whether it has the ability to force a management change at Vale, and whether that option should be pursued.