Vale S. A. (VALE)

[Saving Grace]

BHP/VALE The extent of the damage raises questions about the future of Samarco's iron-ore operation in Minas Gerais state, where two of the mine's three waste-containment dams burst. The mine has ceased operations for now. On Monday, a state environmental official said he would challenge any new relicensing of the project.

Fitch Ratings on Monday put a negative credit watch on four classes of Samarco debt. The ratings agency cited concerns about lower iron-ore production following the accident, as well as the potential for the company to be hit with regulatory, legal or environmental penalties. If "the cause of the breach was due to a technical error, the penalties could be more punitive," Fitch said.

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