Home » Vale, BHP Offer $25B for Mariana Disaster Settlement

Vale, BHP Offer $25B for Mariana Disaster Settlement

Brazillian Authorities Demand More; Negotiations With Prosecutors Continue

by Ikeoluwa Ogungbangbe

A hefty compensation has been offered to Brazilian authorities by mining giants Vale, BHP, and its joint venture Samarco, marking a crucial milestone in the ongoing drama of the 2015 Mariana tailings dam disaster. The 127 billion reais (about $24.88 billion) proposed settlement is meant to compensate for losses and damages resulting from one of the biggest environmental disasters in Brazilian history. Local prosecutors, however, are requesting a higher settlement sum, indicating that talks and court cases are still in progress.

The disaster occurred in November 2015 when a tailings dam at the Samarco iron ore mine, located near the town of Mariana in the southeastern state of Minas Gerais, catastrophically burst. The collapse unleashed a massive flow of mud and mining debris, devastating a nearby village, claiming 19 lives, rendering hundreds homeless, and causing significant environmental damage to the region, including severe pollution to a major river.

A recent securities filing by Vale states that the impacted communities and individuals have already received 37 billion reais as part of the proposed settlement. The remaining 90 billion reais will be divided as follows: 72 billion will be paid over time to municipal and federal governments, and 18 billion will be set aside for upcoming commitments.

In a recent interview with Reuters, Jarbas Soares Junior, the chief prosecutor of Minas Gerais, voiced his displeasure with the suggested amount. He said that the prosecution would push for a settlement that was enhanced to 137 billion reais because the corporations implicated could be able to afford to pay more. “They want a 20-year term for all of this, so adding another 500 million reais per year would be no sacrifice for them,” Soares Junior stated, highlighting the financial capability of the involved firms to increase their compensation package.

Vale has been optimistic about reaching a final agreement by the end of the first half of 2024. The company reiterated its commitment to resolving the issue, stating, “The companies and authorities remain committed to advancing negotiations and approving a definitive agreement. The proposal is intended to provide a mutually beneficial resolution for all parties.” This statement highlights an ongoing effort to find common ground between the corporate and legal perspectives on the disaster’s aftermath.

The initial settlement that BHP, Vale, and Brazilian authorities agreed in 2016 created a framework for overseeing and carrying out damages. This agreement, nevertheless, left open the possibility of additional talks to arrive to a final resolution. Vale stated that as of March 2024, over 430,000 impacted individuals had received 17 billion reais as part of the reparative measures already implemented, and almost 85% of the resettlement cases had been successfully completed.

Along with more general issues about corporate responsibility and environmental management in mining activities, the settlement negotiations are not simply about money. The Mariana tragedy has had a long-lasting effect on the environment and the people, highlighting the necessity of strict safety regulations and accountability in the mining industry.

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