BHP Brasil, along with Vale and its joint venture (JV) Samarco Mineração, have reached a settlement with Brazilian authorities to address the obligations and claims related to the Fundão dam failure in November 2015.
The financial commitment of the settlement is substantial, amounting to 170bn reais ($31.7bn).
The agreement, which is subject to approval by the Brazilian Supreme Court, aims to provide comprehensive reparation for the disaster's impacts.
The parties involved, including the Federal Government of Brazil, the states of Minas Gerais and Espirito Santo, and various public prosecutors and defenders, signed the agreement in Brazil.
This settlement follows extensive negotiations that began in early 2021, seeking to resolve all claims associated with the Samarco dam failure.
The agreement, overseen by a court-appointed mediator, will fully settle the Framework Agreement obligations and the Federal Public Prosecution Office's civil claim, among other claims.
It builds on the work of the Renova Foundation, which has already carried out remediation and compensation efforts totalling 38bn reais.
The financial commitment of the settlement is substantial, amounting to 170bn reais.
This includes both amounts already spent on remediation and future payments. Specifically, 100bn reais will be paid in instalments over two decades to public authorities, municipalities, and Indigenous and traditional communities.
Additional obligations include performance tasks estimated at 32bn reais, to be executed by Samarco in line with the agreement's terms.
BHP Brasil's share of the outflows under this agreement is consistent with the $6.5bn provision for the Samarco dam failure outlined in its financial year report, indicating no need for adjustments at this time.
BHP CEO Mike Henry said: “The Samarco Fundão dam failure in 2015 was a terrible tragedy. It should never have happened and must never be forgotten.
“As shareholders in the Samarco nonoperated joint venture, BHP Brasil and Vale have always been committed to supporting Samarco to do what’s right by the Brazilian people, communities, organisations, and environments affected by the dam failure.
“Today’s signing of a comprehensive agreement with the Brazilian government and public authorities is an important reflection of that commitment.
“It delivers expanded and additional programs for the environment and for the people, including designated funding for the health system, economic recovery, improved infrastructure and extensive compensation and income support measures, including for farmers, fisher people and indigenous and traditional communities.”
In April this year, Vale and BHP, along with JV partner Samarco, proposed a 127bn reais settlement to Brazilian authorities as compensation for the 2015 Mariana tailings dam disaster.
