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France's Vallourec fined $51.6 mln after dike overflows in Brazil

Kitco News

BRASILIA, Jan 12 (Reuters) - Vallourec was fined 288.6 million reais ($51.6 million) for environmental damage by the Brazilian state of Minas Gerais, where heavy rainfall caused a dike owned by the French steel pipe maker to overflow on Saturday.

The state government notified the company on Monday, it said in a statement on its official website, while also immediately suspending activities related to the Lisa dike and the Cachoeirinha pile until documents are presented to guarantee the stability of such structures. Saturday's incident took place at Vallourec's Pau Branco mine near Nova Lima, causing the closure of the BR-40 highway linking Belo Horizonte to Rio de Janeiro.

Vallourec said that due to the heavy rains, solid material was transported from the Cachoeirinha pile to the dike, causing it to overflow. Nobody was injured.

The Minas Gerais government said the company has 20 days to pay the fine or present a defense to the state's environmental agencies. Vallourec did not immediately respond to a request for comment. ($1 = 5.5891 reais)

(Reporting by Marcela Ayres; editing by Jason Neely)

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