SAO PAULO- Brazilian miner Vale said on Thursday it reached a 37.7 billion real ($7 billion) agreement with prosecutors and the state of Minas Gerais to settle claims stemming from the collapse of a mining dam in 2019 which killed 270 people.
In a securities filing, Vale said it will book an additional 19.8 billion reais related to the agreement this year.
Investors cheered the agreement with Vale shares, suspended for the announcement, reopening up 2.3%.
On expectation of the settlement shares had risen 1.7% before the news, adding to a 3% jump on Wednesday as information about the agreement began to emerge.
The disaster, Brazil's most deadly mining tragedy, has hampered Vale's performance over the past two years as it was forced to curb production amid new safety protocols. On Wednesday, Vale reported lackluster annual production figures, but flagged a potential rebound in both output and sales in 2021.
Vale said it closed 2020 with 322 million tonnes of annual iron ore production capacity, and it expects that number to rise to 350 million tonnes by the end of 2021.
($1 = 5.3640 reais)
(Reporting by Tatiana Bautzer; Editing by Christian Plumb) ((tatiana.bautzer@tr.com; Tel: +55-11-5644-7756; Mob: +55-119-4210-4173; Reuters Messaging: tatiana.bautzer.thomsonreuters.com@reuters.net))
