Vale, BHP Ordered to Pay $9.7 Billion for 2015 Brazilian Dam Disaster

(Bloomberg) — Vale SA, BHP Group and their Samarco iron ore venture must pay 47.6 billion reais ($9.7 billion) in compensation for damages caused in a 2015 tailings dam disaster in Brazil, a judge ruled.

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The decision allows for the companies to appeal the sentence. It also states that the damages figure should be adjusted to reflect interest, given the time passed since the disaster.

Vale swung briefly on the news before extending earlier losses to trade 2.9% down for the day in New York.

A resolution over damages would help ease the legal uncertainty hanging over the companies, after the tailings dam collapse eight years ago at Samarco’s that mine killed as many as 19 people, and contaminated waterways in the Brazilian states of Minas Gerais and Espirito Santo.

The companies had been seeking a negotiated settlement outside of court, and had offered to pay 42 billion reais, while the authorities were seeking 126 billion reais, Bloomberg reported in December.

The companies need to meet environmental obligations in addition to making compensation payments, and had provided 34 billion reais in reparations by late last year.

The sentence was issued in response to a request from public prosecutors of two affected states and the federal government for an early trial of a public civil action used as a benchmark in the case. The authorities had asked the firms to be sentenced to pay the equivalent of at least 20% of the profits of Vale and BHP in the last three years.

Vale and BHP said they have yet to be notified of the decision. Samarco declined to comment.

Vale and BHP are also facing a parallel UK class action lawsuit, involving as many as 700,000 people.

(Updates with Vale and BHP comments)

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By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded 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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