BHP and Vale to Compensate for Mariana Dam Collapse with $30 Billion Settlement
BHP and Vale have reached a landmark agreement with the Brazilian government, committing to pay nearly $30 billion in compensation related to the catastrophic 2015 Mariana dam collapse. This incident marked Brazil’s worst environmental disaster, resulting in widespread devastation across numerous villages.
At the signing ceremony, Brazilian President Luis Inacio Lula da Silva emphasized the importance of learning from such tragedies. The dam breach released toxic waste and mud that inundated local towns, affecting rivers and forests.
Tragically, the disaster claimed 19 lives, rendered many homeless, and contaminated water sources in the region. President Lula remarked, "I hope the mining companies have learned their lesson; it would have cost them less to prevent the disaster."
The dam was managed by Samarco, a joint venture between Vale and BHP. Following the disaster, the companies established a foundation aimed at compensating affected individuals, resulting in significant repairs and even the construction of a new town to replace one that was devastated. Nevertheless, many residents express concerns that justice has yet to be fully served, with some still struggling to rebuild their lives almost a decade later.
In parallel to ongoing legal matters in Brazil, over 620,000 claimants have initiated court proceedings against BHP in the UK, seeking approximately $47 billion in damages. The initial phase of this civil trial will examine whether BHP, as the parent company, bears liability for the disaster. Additionally, around 70,000 complainants are pursuing legal action against Vale in the Netherlands.
Both companies deny any wrongdoing and assert that these international legal proceedings are unnecessary, citing existing cases in Brazil.
Residents of Mariana have conveyed their frustrations regarding the lengthy Brazilian judicial process, prompting some to pursue action in the UK. They anticipate that a resolution in Brazil may be forthcoming, pressured by the ongoing international case.
Previously, in 2016, BHP and Vale had agreed to a $3.5 billion compensation deal. However, renewed negotiations began in 2021 due to delays in Brazil’s legal system.
The recent agreement ensures both past and future commitments to aid affected individuals, communities, and ecosystems. Specifically, the companies plan to allocate 100 billion reais (approximately $17.5 billion) to local authorities over the next 20 years, alongside 32 billion reais dedicated to compensating and resettling victims while addressing environmental restoration. The remaining 38 billion reais reflects the amount already disbursed in compensation thus far.
