Mining giants Vale, BHP propose $25B settlement over 2015 Brazil dam collapse

ISTANBUL

Mining giants BHP Group, Vale SA, and their joint venture Samarca have offered to pay Brazil about $25.7 billion in total compensation for 2015 Mariana tailings dam disaster, the group announced on Monday.

"As part of the settlement negotiations, BHP Brasil, Samarco and Vale have submitted a non-binding, indicative settlement proposal which is within BHP Brasil's provision for the Samarco dam failure," a BHP statement said.

The statement added that the offer amounts to a total of about $25.7 billion "on a 100% basis with Samarco as the primary obligor and a 50% contribution from each of Vale and BHP Brasil as secondary obligors if Samarco cannot fund."

The 2015 bridge collapse killed 19 people and spread pollution over a wide area, displacing hundreds and causing shortages of usable water.

Divided into three tranches, the proposal includes $7.71 billion "in amounts already invested on remediation and compensation to date," $14.4 billion "over an extended period of time, well in excess of a decade, to the Federal Government, the States of Minas Gerais and Espírito Santo and the relevant municipalities," and $3.6 billion "in obligations that will be performed by Samarco and the Renova Foundation."

"The negotiations between the parties are ongoing and no final agreement has been reached on the settlement amount or terms," the statement added.

It underlined that "BHP Brasil remains fully committed to bolstering the extensive ongoing remediation and compensation efforts in Brazil through the Renova Foundation," stressing that the Renova Foundation spent about $7.71 billion "on comprehensive reparation and compensation programs to 31 March 2024."

The proposal comes amid renewal by the Brazilian authorities and the companies of talks that collapsed last year.