Brazil’s Vale and Anglo-Australian BHP Billiton, the owners of the Samarco iron ore mine in Brazil, say they have reached a framework agreement with Brazilian federal and state prosecutors to negotiate a settlement of a lawsuit worth billions over the disaster at the mine which resulted in the death of 19 people in 2015 and the polluting more than 400 miles of waterways.
The companies said the agreement establishes “a negotiation process aimed at the possible renegotiation of programs aimed at repairing the consequences of the rupture” of the Fundão dam, which sent millions of gallons of sludge into a river valley in Brazil, spurring many lawsuits against the companies.
The agreement “extinguishes relevant lawsuits”, including a R$20bn ($US5.3bn) case moved by the federal government and the states of Minas Gerais and Espírito Santo, a statement from Vale, the world’s largest iron producer, said.
BHP added the agreement “enhances community participation in decisions related to the remediation and compensation programs.”
“The agreement is important because it demonstrates the convergence of interests between the parties, Vale, BHP Brasil, Samarco, Public Prosecutors, Public Advocates and Public Defenders, representing an additional advance for those affected,” said Fabio Schvartsman, CEO of Vale. BHP said the new “Governance Agreement” was conditional on Brazil’s federal government signing the deal, and was also subject to ratification by the 12th Federal Court of Minas Gerais.
The new agreement also allows for the $US41.5 billion civil claim to be suspended for two years, after the ratification of the new governance agreement.
“During the two year period, the parties will work together to design a single process for the renegotiation of the (remediation and compensation) programs and progress settlement of the BRL155 billion Civil Claim.
“The renegotiation process will take into account the principles and rules established under the Framework Agreement, and will be aimed at improvement of the programs, with the involvement of the affected communities,” BHP said in its statement.
Samarco produced high-quality iron-ore pellets before it closed, and steelmakers are now paying miners a premium (for the higher iron content) for that type of ore to ordinary non-processed iron ore.
Samarco accounted for around 20% of the global iron-ore pellet market before its suspension. BHP Billiton would not say when Samarco might restart.
