The Samarco dam failure occurred in 2015, when the Fundão tailings dam at the Germano iron ore mine in Minas Gerais suffered a catastrophic failure, which buried a nearby village, killing 19 people and leaving hundreds homeless
The village of Bento Rodrigues after the disaster. (Credit: Bento Rodrigues, Mariana, Minas Gerais/Wikipedia)
BHP’s affiliate BHP Brasil, and its partners Samarco Mineração, and Vale, are in talks with Brazilian authorities over a $25.7bn settlement related to the Mariana tailings dam disaster.
Also known as the Samarco dam failure, the disaster occurred in 2015, when the Fundão tailings dam at the Germano iron ore mine in Minas Gerais suffered a catastrophic failure.
The accident caused a huge flow of mud and mining waste that buried a nearby village, killing 19 people and leaving hundreds homeless, and also polluted a major river.
BHP Brasil, Samarco, and Vale are currently in negotiations with Brazil’s Federal and State Governments and other entities, relating to the Samarco dam failure.
BHP in its statement said: “The negotiations between the parties are ongoing and no final agreement has been reached on the settlement amount or terms.
“BHP Brasil remains fully committed to supporting the extensive ongoing remediation and compensation efforts in Brazil through the Renova Foundation.
“The Renova Foundation has spent approximately BRL37bn (approximately $7.71bn) on comprehensive reparation and compensation programs to 31 March 2024.”
According to the Australian mining company, the partners seek a settlement under the Framework Agreement, the Federal Public Prosecution Office Claim, and other claims.
They have submitted a non-binding, indicative settlement proposal for a total value of around BRL127bn (around $25.7bn), with Samarco serving as the primary obligor.
Vale and BHP Brasil, as secondary obligors, will contribute 50% each if Samarco fails to fund.
BHP Brasil’s share in the totals $6.5bn, which includes estimated costs to resolve all aspects of the Federal Public Prospection Office Claim and the Framework Agreement obligations.
The proposed settlement includes BRL37bn ($7.71bn) investment in remediation and compensation for the dam failure.
It includes a cash payment of BRL72bn ($14.4bn) to the Federal Government, the States of Minas Gerais and Espírito Santo and the relevant municipalities, for an extended time.
The settlement also includes R$18bn ($3.6bn) in obligations that will be performed by Samarco and the Renova Foundation.
In addition, the settlement includes around BRL17bn ($3.51bn) in indemnities and emergency financial assistance directly to around 430,000 people.
Furthermore, around 85% of the resettlement cases for the communities impacted by the Samarco dam failure have been completed, said the Australian mining company.