BHP’s $31.7 billion (R557bn) settlement for damages emanating from the collapse of a tailings dam operated by its Samarco joint venture with Vale S.A. has been ratified by the Supreme Court in Brazil.
BHP, which is facing separate litigation in the UK, had been accused of denying responsibility for the 2015 collapse of the Fundao Dam, which killed 19 people, displaced thousands and left the environment heavily damaged.
The Brazilian settlement marks a landmark development in the company’s efforts to settle damages emanating from the disaster.
BHP said yesterday that agreements it and Vale had entered together with Brazilian authorities and communities had been “ratified by the Supreme Court of Brazil in Brasilia” on 6 November 2024.
“The Agreement delivers a full and final settlement of the Framework Agreement obligations, the Federal Public Prosecution Office civil claim and other claims by the Public Authorities relating to Samarco’s Fundão dam failure on 5 November 2015,” said BHP.
“The financial value of the Agreement is $31.7bn on a 100% basis and provides reparation for the impacts of the dam failure that will be delivered to the people, communities and environment impacted by the dam failure.”
Mike Henry, CEO for BHP said last month that “the Samarco Fundão dam failure in 2015 was a terrible tragedy” that “should never have happened and must never” be forgotten.
Yesterday, BHP explained that it, together with Vale as shareholders in Samarco, “have always been fully committed to supporting the extensive ongoing remediation and compensation efforts” in Brazil.
“BHP Brasil will continue to focus on supporting the long-term recovery of the communities and environment affected by the dam failure,” said the company.
Some of the settlements under the ratified agreement include performance obligations for an estimated financial value of approximately $5.8bn to be carried out by Samarco.
This will be used to provide direct benefits to the people, communities and environment affected by the dam failure.
“The obligations to perform will include the establishment of a new compensation and indemnification system, commitment to remove a certain amount of tailings from the Doce River subject to a licensing process, ongoing monitoring for potential environmental contamination in certain areas of the Doce River and the transition of the Renova Foundation's remaining programs to Samarco,” BHP has previously said.
There is also about $18bn to be paid in instalments over 20 years to the Public Authorities, the relevant municipalities and indigenous peoples and traditional communities affevtes by the disaster.
The dam was operated by Samarco, which is jointly owned by Vale and BHP, collapsed in 2015, driving toxic and harzadous material downstream.
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