BHP, Vale present $27.5 billion proposal to Brazil over Samarco Mine disaster

April 29, 2024

BHP and Vale have proposed a $27.5 billion settlement to Brazilian authorities over the Fundão Dam tailings facility failure at the Samarco Mine in 2015. That collapse killed at least 19 people and left more than 700 people homeless.

The Guardian reported that BHP said it had offered the settlement to the Brazilian authorities in partnership with fellow miner Vale, its 50:50 joint venture partner in a local subsidiary, Samarco.

The Fundão dam, owned by Samarco collapsed on Nov. 5, 2015 in the Minas Gerais region of Brazil.

The accident also began a long series of legal claims against BHP, the Australian mining company which had its primary stock market listing in London at the time of the disaster.

The world’s largest mining company said that it and Vale had put forward a proposal worth a total of 127 billion Brazilian reals (£19.9bn), although some of that sum has already been paid.

Under the terms of the proposal, the two companies would agree to pay $14.4 billion over the course of “well in excess” of a decade, to Brazilian national, regional and municipal governments.

They would also fund a further $3.6 billion in compensation and clean-up efforts via the Renova Foundation, which was set up in the wake of the disaster.

The remainder of the settlement, $7.7 billion, has already been spent via the foundation, including $3.5 billion that has gone directly to about 430,000 affected people.

The proposal by BHP and Vale would wrap together existing agreements with Brazilian authorities with outstanding claims by various government bodies in a single settlement.

BHP announced its settlement proposal to investors after speculation in the Brazilian press.

It said: “The negotiations between the parties are ongoing and no final agreement has been reached on the settlement amount or terms.”
Last week, the London-listed mining company Anglo American rejected a “highly unattractive” $39 billion takeover approach from BHP.

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