The Mariana dam collapse in Brazil in 2015 was one of the country’s worst environmental disasters, resulting in 19 deaths, hundreds of people left homeless, forests flooded, and the Doce River polluted. The dam collapse occurred at an iron ore mine owned by Samarco, a joint venture between Vale and BHP. In response to the disaster, Brazil has signed a 170 billion reais ($29.85bn) compensation agreement with the mining companies involved. This agreement was signed on Friday, with Brazilian President Luiz Inacio Lula da Silva attending a ceremony in Brasilia to mark the occasion.
The compensation agreement requires that the companies involved pay a total of 132 billion reais ($23bn) to public authorities over 20 years for the environmental and economic damages caused by the disaster. Additionally, 32 billion reais ($5.6bn) will be allocated to compensate affected individuals and carry out reparation actions. The miners have already disbursed 38 billion reais ($6.6bn) in response to the disaster. These resources aim to enable local authorities to compensate families for financial losses, fund environmental recovery efforts, and support economic activities, health, and infrastructure in the affected areas of Minas Gerais and Espirito Santo.
Annual payments under the agreement are scheduled until 2043, with varying amounts each year. The compensation will provide justice to the families directly affected by the disaster and have a positive impact on various aspects of the affected areas. BHP expects the outflows under this agreement to align with its current provision for the Samarco disaster, with no update needed to the existing provision. The agreement has the potential to resolve over a hundred lawsuits against the mining companies in Brazil and may also limit legal action abroad, according to sources close to the matter.
BHP is currently facing a lawsuit worth up to 36 billion pounds ($47bn) in London’s High Court over its responsibility for the Mariana disaster. The company argues that this lawsuit duplicates ongoing legal proceedings and reparation programs in Brazil and should therefore be dismissed. The signing of the compensation agreement on Friday could potentially bring an end to the legal disputes in Brazil and internationally. The resources provided by the agreement will play a crucial role in supporting the affected communities, restoring the environment, and helping the regions impacted by the disaster recover and rebuild.
