BHP, Vale to share costs of Samarco proceedings in UK, Netherlands
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The news: Mining giant BHP says it has reached a deal with Brazil’s Vale to equally share the cost of any damages from court proceedings in the UK and Netherlands related to a 2015 dam collapse in Brazil.
The numbers: BHP and Vale will each pay 50% of any amount potentially payable to claimants in the UK proceedings, the Netherlands proceedings, and others in Brazil covered in the agreement.
BHP is a defendant in a group action claim in the English High Court, brought by more than 600,000 claimants seeking damages for collapse of the Fundao Dam, owned by Samarco, a joint venture of BHP and Vale.
In March 2024, a new claim was filed against Vale and the Dutch subsidiary of Samarco in the Netherlands in which BHP is not a defendant.
The context: The 2015 collapse of the Fundao dam in southeastern Brazil, owned by the Samarco venture, killed 19 people and caused a giant mudslide that uprooted homes and villages and triggered Brazil's worst environmental disaster.
BHP said the new deal reinforces the framework agreement signed in 2016 for BHP Brasil and Vale to each contribute 50% to the funding of the Renova Foundation, which was set up to ensure remediation for the damages caused by the dam collapse.
BHP said it would continue to defend the UK proceedings and said it does not consider that it is liable to the related claimants. Earlier this year, the two mining companies presented Brazilian authorities with a $38 billion settlement proposal for reparations related to the disaster.
Vale and BHP struck an initial deal over the disaster in 2016 which created a foundation to implement reparations but had a complicated chronology for payments and left space for a final definitive agreement. Vale has previously said it expected to reach a final agreement regarding the collapse of the dam by the end of the first half of 2024.
The source: ASX announcement
