BHP has done a deal with Brazil over the fatal Samarco mine disaster

A fireman in Paracatu de Baixo, Minas Gerais, Brazil. Douglas Magno/AFP/Getty Images
  • BHP has signed a deal which settles a $AU7 billion civil claim for the Samarco fatal mine disaster in Brazil.
  • A final payout isn’t known but this settlement has a framework for the payment of compensation and remediation work.
  • A claim of $AU55.3 billion by federal prosecutors has been suspended for two years while talks continue.

BHP Billiton has signed a settlement with Brazilian prosecutors on the fatal Samarco tailing dam disaster, says the world’s biggest mining group.

A total value on the settlement wasn’t announced but it will mean a fund being created for clean-up costs, remediation and for compensation.

A dam holding mining waste ruptured on November 5, 2015, sending a wall of mud downstream, leaving 19 dead and hundreds homeless in what has been described as Brazil’s worst environmental disaster.

In 2016, BHP posted a $US2.2 billion ($AU2.8 billion) loss for the impact of the Samarco dam failure. Analysts calculated the impact from the mud slide would strip about 4% from BHP’s profits.

BHP, its partner Vale, the Federal Government of Brazil, the Brazilian states of Espirito Santo and Minas Gerais and other public authorities have entered into a Framework Agreement to settle a BRL20 billion ($UA7.1 billion) Civil Claim.

The parties have agreed to file a petition with Brazil’s Federal Court to dismiss that BRL20 billion claim and replace that with an arrangement to enhance community participation in decisions related to remediation and compensation programs.

Samarco Mineração is jointly owned by BHP Billiton Brasil and Vale S.A.

Federal Prosecutors in May 2016 started proceedings against Samarco, Vale and BHP Brasil for BRL155 billion ($AU55.3 billion) for social, environmental and economic compensation relating to the Samarco dam failure.

This latest agreement suspends that BRL155 billion claim for two years while the parties work together to design a single process for the renegotiation of a settlement.

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