UPDATE 1-Brazil prosecutors seek final settlement over Samarco dam disaster

(Adds prosecutor quote, company comment)

By Marta Nogueira

RIO DE JANEIRO, July 9 (Reuters) – Federal prosecutors in Brazil are seeking a definitive settlement with miner Samarco and it's shareholders, BHP Group and Vale, for damages caused by the rupture of a tailings dam in 2015, the lead prosecutor told Reuters.

Carlos Bruno Ferreira da Silva, who is leading the task force responsible for the case, said in an interview this week that prosecutors felt a previous agreement – in which the companies agreed to pay around 20 billion reais ($3.80 billion)- had not been effective enough.

He declined to put a figure on how much companies might have to pay, but cited a previous lawsuit seeking 155 billion reais as a potential benchmark.

He also said the settlement would look to learn from the agreement signed with Vale for a separate dam disaster in 2019 at Brumadinho, in which the company agreed to pay 37.69 billion reais ($7.17 billion).

The dam collapse at the Samarco iron ore mine near the town of Mariana in the Brazilian state of Minas Gerais is widely regarded as the country's largest ever environmental disaster. It released enough thick red sludge to fill about 12,000 Olympic swimming pools, flattened an entire village, killed 19 people and left hundreds homeless.

The waste flooded the Rio Doce river, choking fish and spitting them lifeless to the surface.

In 2016, the companies agreed an initial settlement with prosecutors which created a foundation through which to repair damages and a complicated chronology for payments. But the deal left open space for a final definitive agreement.

Silva said there were nearly 85,000 still-unresolved lawsuits relating to the disaster and added that authorities, the mining companies and the impacted population were all unhappy with the earlier agreement.

"Everyone thinks the situation could be better," he said.

In response to requests for comment, Samarco, Vale, BHP and the Renova Foundation – responsible for implementing reparations – said they remain committed to repairing the damage done.

The negotiations with prosecutors, they added, will not interfere with projects and compensations currently in progress. ($1 = 5.2579 reais) (Reporting by Marta Nogueira, writing by Stephen Eisenhammer, Editing by Chris Reese and Diane Craft)

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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