Vale Mining Continues Legal Battle With Aneel Over Hydroelectric Plant

Vale Has Received Over R$ 500 Million Since November 2015 for Power Generation from Plant That Has Not Operated Since the Tragedy in MG

The mining company Vale decided to continue its legal battle with Aneel (National Electric Energy Agency) over a hydropower plant it owns that does not deliver energy. Vale has received over R$ 500 million since November 2015 for power generation that was never delivered from the turbines of its Risoleta Neves hydropower plant in the Mariana region of the state of Minas Gerais. Read also: Vale informs that the construction of the railway may cost R$ 8.7 billion

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Vale’s Plant

The Risoleta Neves hydropower plant belongs to the Candonga consortium, with Vale owning 77.5% and Cemig 22.5%. The mining company’s hydropower plant ceased operations in November 2015 when one of the world’s largest environmental tragedies occurred.

The tragedy released thousands of tons of iron ore waste into the river known as “Rio Doce.” The mud traveled through 40 cities until it reached the Atlantic Ocean, along the coast of Espírito Santo.

Cancellation of Payment to Vale

In May of this year, the case was taken to court, and Aneel – National Electric Energy Agency attempted to prevent payments to Vale. Since the tragedy, even though the plant did not produce energy, the company has already received over R$ 500 million as if it were still in operation today.

The total shutdown of the mining company’s hydropower plant prompted Aneel to naturally request the suspension of payments to the Risoleta Neves plant for failing to generate energy. However, Vale not only appealed against the agency’s administrative actions but also sought and obtained a ruling that, to this day, maintains payments to the Candonga consortium.

The agency indicates that in fact, all plants pay monthly to the Risoleta Neves plant and gradually pass the cost on to energy consumers in Brazil through electricity bills. Data from Aneel shows that this situation has caused direct losses of over 100 million reais to consumers.

“Old” Case of the Mining Company

In October of last year, the President of the STJ, relator and minister, Humberto Martins, denied Aneel’s appeal, upheld the payments requested by Vale, and maintained the so-called Energy Reallocation Mechanism (MRE). This system was created to reduce the financial impact caused by the risk of insufficient rainfall in the country, meaning that other plants with limited water available to generate electricity are compensated by other plants in better conditions. Therefore, this situation does not relate to the Risoleta Neves hydropower plant, which was engulfed by the mud from Samarco.

Aneel appealed the decision of Minister Humberto Martins, and the case will now be analyzed by the Special Court of the STJ, composed of the 15 most senior ministers. The first to vote is the relator of the case, who will review the agency’s arguments against his previous decision. Following this, the other ministers will indicate whether they agree with the relator’s vote. The agency, represented by the Attorney General’s Office, requested that the case be removed from the virtual agenda, where no discussion is needed during the judgment. The concern is that a decision might be made without any discussion on the matter.