Global resource giants, BHP and Vale SA have agreed to share costs of damages to groups and communities affected by the collapse of the Fundão tailings dam owned by the two firms’ Samarco joint venture in Brazil back in 2015.
In November, 2015 the Fundão tailings dam burst releasing large volumes of toxic tailings waste that cascaded into the Rio Doce Basin of Brazil, marking one of the worst environmental disasters in the country.
As many as 19 people were killed, many others were affected and scores left needing financial assistance.
BHP said on Friday that it had so far spent billions of dollars in financial aid and direct compensation to those affected by the collapse of the Brazilian dam.
“BHP Brasil remains committed to continue supporting the local remediation efforts in Brazil through the Renova Foundation,” the company said.
“Those efforts have already provided approximately $3.5 billion (R62.9bn) in compensation and direct financial aid in relation to the dam failure to approximately 430 000 people to May 31, 2024.”
In addition, BHP has now entered into an agreement with its Samarco JV partner Vale to share all costs that may arise from damages claims arising out of the disaster. They are, however, denying any liability for the collapse of the Brazilian dam.
“BHP Brasil and Vale have entered into an agreement for BHP and Vale to each pay 50% of any amounts potentially payable to the claimants in the English proceedings, the Netherlands proceedings and other proceedings in Brazil covered by the agreement without any admission of liability for these proceedings,” it said.
BHP said it would continue to defend itself against claimants in English courts. It said it believed the court proceedings in the UK “are unnecessary because they duplicate matters already covered by the existing and ongoing work of the Renova Foundation and legal proceedings” in Brazil.
Earlier this year, new claims were filed against Vale and a subsidiary of Samarco in the Netherlands. The claims were filed on behalf of about 78 000 Brazilian natives and are for supposed compensation relating to the Fundão Dam failure.
However, BHP is not a defendant in the Netherlands proceedings although it has agreed to share any costs arising out of the proceedings in the country.
“The agreement (with Vale) reinforces the terms of the framework agreement entered into in 2016 which require BHP Brasil and Vale to each contribute 50% to the funding of the Renova Foundation for compensation of persons impacted by the Fundão Dam failure, where Samarco is unable to contribute that funding,” said BHP.
In the first quarter of the current year, Samarco reported swinging back to profitability.
Its net profit for the period amounted to $329.2 million compared to a net loss of $347.9m in the same quarter a year earlier. This was on the back of an uplift in net sales revenues that sprung up by 18% to $434.8m attributable firmer prices.
BUSINESS REPORT