Mining Giants BHP and Vale Reach $30 Billion Compensation Settlement for 2015 Dam Disaster

The 2015 disaster catalyzed widespread destruction and fatalities, leaving lingering impacts on Brazilian communities.

In a landmark agreement, mining corporations BHP and Vale have finalized a settlement with the Brazilian government to provide nearly $30 billion in compensation stemming from the catastrophic collapse of the Mariana dam in 2015. This incident is considered Brazil's worst environmental disaster, resulting in the loss of 19 lives and leaving countless individuals homeless as toxic waste and mud cascaded through towns, rivers, and forests. Brazilian President Luis Inacio Lula da Silva was present during the signing ceremony, emphasizing the importance of learning from such tragedies.

He remarked, "I hope the mining companies have learned their lesson; it would have cost them less to prevent the disaster," highlighting the accountability of businesses for environmental safety. The dam in question was part of a joint venture operated by Samarco, jointly owned by Vale and BHP.

Since the dam failure, both companies established a foundation aimed at compensating those affected, which has thus far facilitated repairs costing billions. Efforts included the construction of a new town to replace one devastated by the disaster. However, many residents continue to express dissatisfaction, asserting that justice has not been served and they have not received sufficient support to rebuild their lives almost a decade later.

In a separate legal battle, over 620,000 individuals have filed a lawsuit against BHP in the UK, pursuing approximately $47 billion in damages in what many consider a delayed reaction to inadequate support in Brazil. The initial phase of this civil trial focuses on whether BHP can be held liable as the parent company. Additionally, around 70,000 claimants have launched legal actions against Vale in the Netherlands.

Both corporations maintain their stance of non-liability, labeling the international legal pursuit as redundant given the ongoing proceedings within Brazil. Following significant delays in the Brazilian legal system, frustrated community members had opted to join the UK trial, believing it may expedite their quest for justice.

In 2016, BHP and Vale had committed around $3.5 billion in adjustable compensation. However, negotiations resumed in 2021 due to ongoing delays in achieving resolution through Brazil's judiciary. The recent settlement encompasses both past obligations and forward-looking enhancements aimed at aiding impacted individuals, communities, and ecosystems. Specifically, the companies consented to allocate 100 billion reais ($17.5 billion) to local authorities over two decades, alongside 32 billion reais for victim compensation and environmental restoration, while the remaining 38 billion reais reflects compensation already disbursed by the firms.