BHP to review court decision on 2015 Brazil dam disaster
Australia-based global mining giant BHP will review a court decision in Brazil that ordered it and the Vale group to pay at least $9.7bn in damages for a deadly disaster at a mine waste dam in 2015.
BHP and iron-ore producer Vale had a 50/50 stake in Samarco, which operated Fundão tailings dam that burst in 2015, killing 19 people and causing extensive damage to the environment in the country.
The world’s biggest miner said in a statement on Friday it would review the decision to assess its implications, the potential for an appeal and any potential impact to its provision related to the Samarco dam failure once the court’s decision is formally presented to it.
BHP said the parties have been in talks on the matter to reach a settlement since early 2021 and further negotiations are expected to resume in February. As the preliminary provision for the settlement of the case, the miner had set aside $3.7bn as of June 2023.
“BHP Brazil is fully committed to supporting the extensive ongoing remediation and compensation efforts in Brazil through the Fundação Renova, which is a not-for-profit, private foundation that was established after the Fundão tailings dam failure to implement 42 remediation and compensatory programmes in Brazil,” it said in a statement.
The $9.7bn is categorised as “collective moral damages” and is separate from other liabilities that Samarco still has to account for in the long-running case.
When the dam collapsed, 19 people were killed when mud and toxic mining waste swept into the Doce River, obliterating villages and contaminating water supplies before reaching the Atlantic Ocean more than 650km away.
Reparation and compensation programmes implemented by the Renova Foundation, a redress scheme established in 2016 by Samarco and its shareholders, had funded more than $6bn in financial aid for those affected by the disaster, according to BHP.
BHP shares closed 0.4% lower at R583.70 on the JSE on Friday, though they have more than doubled over the past five years, according to data compiled by Infront.