Brazil secures £30 billion settlement with BHP, vale over 2015 dam disaster

Brazilian President Luiz Inácio Lula da Silva attended the signing ceremony in Brasília, where officials outlined the agreement's terms.

Brazil's President Luiz Inacio Lula da Silva speaks at a signing ceremony of a compensation agreement for damages caused by the 2015 collapse of the Mariana dam owned by the mining company Samarco, a joint venture of Vale and BHP, at the Planalto Presidential Palace, in Brasilia, Brazil. (AP)

Brazil has finalised a 170 billion reais (£30 billion) compensation deal with mining companies BHP, Vale, and Samarco over the 2015 Mariana dam collapse.

This incident, one of Brazil’s most significant environmental disasters, saw a tailings dam near Mariana in southeastern Brazil fail, releasing a flood of mine waste that tragically claimed 19 lives, displaced hundreds, and severely polluted the Doce River.

Brazilian President Luiz Inácio Lula da Silva attended the signing ceremony in Brasília, where officials outlined the agreement’s terms, including an initial payment of 5 billion reais due within 30 days, as reported by Reuters.

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The plan mandates the companies involved to contribute 100 billion reais in “new resources” over the next 20 years, with an additional 32 billion reais designated for compensating affected individuals and financing further reparative measures.

“These resources will enable justice for the families impacted, not only aiding environmental recovery but also revitalising local economies, healthcare, and infrastructure,” said Brazil’s solicitor general, Jorge Messias.

BHP, which noted in a statement that the required payments align with its existing £5.3 billion provision, confirmed it would not need to adjust this amount further at present. Vale also increased its own provisions for Samarco, adding nearly £800 million for a total planned cost of £3.6 billion.

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According to sources, the agreement could resolve over 100 lawsuits in Brazil and potentially prevent further legal actions abroad.

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However, BHP is currently contesting a £36 billion lawsuit in London’s High Court, which it argues duplicates proceedings in Brazil. “That argument no longer holds up,” Vale’s vice-president for corporate and external affairs, Alexandre D’Ambrosio, stated, given that the compensation agreement has now been formalised.

(With input from Reuters)

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