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Mining giants sign $30bn settlement for 2015 Brazil dam collapse

Getty Images A man looks at where a dam burst in the village of Bento Rodrigues, in Mariana, the southeastern Brazilian state of Minas Gerais on November 6, 2015.Getty Images
The dam collapse in 2015 destroyed many villages and engulfed homes

The mining giants BHP and Vale have signed a deal with the Brazilian government to pay nearly $30bn (£23bn) in compensation for the Mariana dam collapse in 2015 that caused the country's worst environmental disaster.

Brazilian President Luis Inacio Lula da Silva attended the signing of the deal on Friday.

The dam collapse released toxic waste and mud, which flooded nearby towns, rivers and forests.

It killed 19 people, left hundreds others homeless, and poisoned the river.

President Lula said: "I hope the mining companies have learned their lesson; it would have cost them less to prevent the disaster."

The dam was owned by Samarco, a joint venture between Vale and BHP.

Since the disaster, the companies have set up a foundation to compensate people, which has already carried out billions of dollars’ worth of repairs. This included building a new town to replace one of the towns that was destroyed.

However, many people in the community were still arguing they had not received justice or enough to rebuild their lives nine years on.

Separately to these legal proceedings in Brazil, more than 620,000 people had taken BHP to court in the UK, where BHP was headquartered at the time, in a trial that started earlier this week.

They are seeking about $47bn in damages in the civil trial. The first stage of it will determine if BHP – as a parent company – was liable. About 70,000 complainants are also taking Vale to court in The Netherlands.

Both companies deny liability and argue that this overseas legal action is "unnecessary" and duplicates legal proceedings in Brazil.

Reuters Brazil's President Luiz Inacio Lula da Silva attends a signing ceremony for a compensation agreement between mining companies Vale and BHP and Brazilian authorities, related to the 2015 Mariana dam collapse in southeastern Brazil, at the Planalto Palace in Brasilia, Brazil, 25 October 2024Reuters

Some members of the community in Mariana had told the BBC they had joined the UK legal action after frustration that the Brazilian proceedings were taking too long, but suspected that the Brazilian settlement may be reached soon after the UK case opened due to more international pressure.

In 2016, both companies agreed to pay about $3.5bn in today’s rate in compensation but negotiations were reopened in 2021 due to the slow progress of Brazil’s justice system in resolving the dispute.

Friday’s agreement covers their past and future obligations to assist people, communities and ecosystems affected by the disaster.

The companies agreed to pay 100bn reais ($17.5bn; £13.5bn ) to local authorities over 20 years and 32bn reais towards compensating and resettling the victims and repairing the harm caused to the environment.

The remaining 38bn reais is the amount the companies say they have already paid in compensation.