Sao Paulo - Vale SA, the world’s biggest iron-ore miner, was cut from an index of companies with the best social and environmental performance in Brazil. Shares pared gains.
While exchange BM&FBovespa didn’t give a reason for the Rio de Janeiro-based company’s elimination from the ISE corporate sustainability index, Vale said the decision probably stems from a dam collapse at its joint venture with BHP Billiton three weeks ago, which authorities are describing as Brazil’s worst mining disaster.
The exclusion “doesn’t change our commitment with the sustainability of our operations, which for five consecutive years kept us in the portfolio, as a signal of recognition that this subject is part of our values”, Chief Financial Officer Luciano Siani Pires said by e-mail.
ISE was created in 2005 to encourage companies to be ethically responsible. The revised list of members runs from January 4 until December 29 next year, BM&FBovespa said on Thursday in a statement that didn’t mention the November 5 dam collapse. Vale shares rose 0.5 percent to 11.76 reais at the close of trading in Sao Paulo after gaining as much as 1.5 percent.
Any company can apply to be part of the equity index with candidates chosen each year based on policies and practices. Vale participated of the 2016 selection process, but was rejected, it said in an e-mailed response to questions.
Steelmaker Gerdau SA, logistics company JSL SA, water utility Cia. de Saneamento Basico do Estado de Sao Paulo and power company Cia. Energetica do Ceara were also cut form the index, while Cia. Energetica de Sao Paulo and telco Oi SA were added.
A United Nations probe said waste from the burst dam was toxic and steps taken by BHP and Vale to prevent harm weren’t sufficient. The companies’ joint venture Samarco Mineracao SA said there’s no danger to human health.
BLOOMBERG