Mining Corporations Agree to Landmark $30bn Settlement in Brazil Dam Disaster

The mining companies BHP and Vale have signed a critical deal worth nearly $30 billion with the Brazilian government for damages resulting from the Mariana dam disaster of 2015. This agreement is viewed as a step toward justice for the affected communities and reflects ongoing tensions over environmental accountability.

The mining corporations BHP and Vale have reached a monumental agreement with the Brazilian government to settle claims connected to the catastrophic dam collapse in Mariana that occurred in 2015, marking the most severe environmental disaster in Brazil's history. On Friday, this settlement, which amounts to nearly $30 billion (£23 billion), was announced during an event attended by Brazilian President Luis Inacio Lula da Silva.

The dam, owned by Samarco—a joint venture between Vale and BHP—collapsed, unleashing a torrent of toxic waste and mud that devastated nearby villages, contaminated rivers, and severely impacted local ecosystems. The disaster led to the tragic loss of 19 lives and left countless residents homeless, as communities were inundated with harmful sludge.

President Lula remarked on the agreement, emphasizing the importance of corporate responsibility in preventing such disasters, stating, "I hope the mining companies have learned their lesson; it would have cost them less to prevent the disaster." As part of their ongoing response to the calamity, BHP and Vale established a foundation dedicated to aiding victims and have invested billions in repair efforts, including constructing a new town for those displaced by the disaster.

Despite these efforts, many survivors remain discontent, feeling that the compensation provided has been inadequate for rebuilding their lives almost a decade later. Concurrently, over 620,000 individuals have initiated legal proceedings against BHP in the UK, claiming approximately $47 billion in damages. This trial aims to determine whether BHP, as the parent company, bears liability. Additionally, around 70,000 complainants are pursuing legal action against Vale in the Netherlands.

Both BHP and Vale maintain that they are not liable for the events leading to the collapse, labeling these international legal pursuits as "unnecessary" and overlapping with the ongoing legal processes in Brazil. Reports indicate that some affected individuals in the Mariana community have opted to pursue legal recourse in the UK out of frustration with the sluggish pace of the Brazilian justice system.

Initially, in 2016, both companies had agreed to a settlement of about $3.5 billion in today’s currency, but negotiations were resumed in 2021 due to dissatisfaction with the slow resolution process in Brazil. The latest agreement outlines past and future commitments to support victims, communities, and ecosystems negatively impacted by the disaster. The settlement promises 100 billion reais (approximately $17.5 billion) to local authorities over the next two decades and an additional 32 billion reais earmarked for victim compensation, resettlement, and environmental restoration. The companies also assert that they have already disbursed 38 billion reais in compensation to date.