Mining Technology

BHP, Vale reach settlement in UK over Mariana dam disaster

The two companies will cover half of any potential payments to claimants from the English and Netherlands proceedings.

Mining giant BHP has reached an agreement with Vale concerning the group action proceedings in the UK related to the Fundão tailings dam collapse in Brazil, which claimed 19 lives.

The dam, owned and operated by Samarco, a joint venture between BHP Billiton Brasil (a BHP subsidiary) and Vale, collapsed in 2015, leading to significant environmental and community impact. Both BHP Brasil and Vale hold a 50% stake in Samarco.

BHP Group (UK) and its Anglo-Australian parent company BHP are defendants in a High Court claim in England, facing more than 600,000 claimants seeking damages for the dam failure.

Despite the proceedings, BHP maintains that it is not liable and intends to continue its defence.

The company argues that the English legal actions are redundant, as they replicate the efforts and legal processes already in place in Brazil, including the work of the Renova Foundation.

In March 2024, a new claim was filed against Vale and Samarco's Dutch subsidiary in the Netherlands by approximately 78,000 Brazilian claimants seeking compensation for the dam collapse. BHP is not named as a defendant in this case.

Under the new agreement, BHP and Vale will each cover half of any potential payments to claimants from the English and Netherlands proceedings, as well as other related proceedings in Brazil.

This arrangement is made without any admission of liability and aligns with the 2016 Framework Agreement, which stipulates that BHP Brasil and Vale each fund 50% of the Renova Foundation's compensation payments when Samarco cannot.

BHP previously filed a contribution claim against Vale in December 2022 due to Vale not being included in the English lawsuit.

This claim argued that Vale should contribute to any damages paid if BHP's defences failed. With the recent agreement, BHP will withdraw this claim.

BHP Brasil continues to support the Renova Foundation's local remediation and compensation efforts in Brazil, which have provided around $3.5bn (19bn reais) in aid to roughly 430,000 individuals affected by the dam failure as of 31 May 2024.

Meanwhile, earlier this month, BHP said that it will temporarily halt its Western Australia Nickel operations, including the Nickel West operations and the West Musgrave project, starting October 2024.