Fitch downgrades Vale after mine collapse

Fitch Ratings said it downgraded the foreign-currency and local-currency issuer default ratings of Vale SA to BBB- from BBB+, as well as it unsecured bonds.

All of these ratings and the company's AAA(bra) national scale ratings also were been placed on Rating Watch negative.

These actions follow the collapse of the company's tailings dam at its Feijao mine on Friday, Fitch said.

These downgrades reflect an expectation that the company will incur heavy reparation costs as a result of this accident that resulted in 16 confirmed fatalities and more than 300 missing people, the agency said.

It caused widespread environmental damage and destroyed property, Fitch added.

The agency said the company to incur substantial monetary fines as this mining accident occurred about three years after another dam collapsed at the company's mining joint venture, Samarco.

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