25 January 2019: Vale's Brumadinho dam collapses
A tailings dam at a Vale iron ore mine near Brumadinho, Brazil, burst and sent a wave of mud over the site and nearby communities, killing about 270 people. It came only a few years after another deadly dam failure at a Vale joint venture. Vale shares lost roughly a quarter of their value on the next trading day, and the company faced years of lawsuits, fines and safety overhauls.
The lesson: Cost savings on safety are borrowed money; the repayment comes with interest you cannot predict.
What it meant for investors
$1,000 in Vale at the start of 2020 → $846 today, vs $2,092 in the S&P 500.
We start the clock at the start of 2020, the first year in our price data after the event. That is a loss of $154, while a plain index fund over the same years made $1,092.
What Vale teaches: A commodity miner is a leveraged bet on its biggest customer's appetite, and tailings-dam disasters show that environmental risk becomes financial risk overnight.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2015 | $8.00 | $1,375 | $3,301 |
| 2018 | $12.00 | $917 | $2,519 |
| 2020 | $13.00 | $846 | $2,092 |
green = beat the S&P 500 · red = lost money
What if you bought Vale? Every starting year and the full story →
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
Play Sixty-40