BHP Group (ASX:BHP) has entered into an agreement with Vale S.A (BVMF:VALE3) to each pay 50% of any amounts payable to the claimants regarding a group action proceedings in respect of the Fundão Dam failure in Brazil.
On 5 November 2015, the Fundão tailings dam operated by Samarco — a non-operated joint venture between BHP and Billiton Brasil and Vale — collapsed, which resulted in 19 deaths.
It is reportedly the largest ever recorded resulting damage, with pollutants extending for 668km of waterways in Brazil. Over 40 million cubic metres of mine tailings was released into the Doce River, which continued out into the Atlantic Ocean.
Since then, numerous legal proceedings have begun in Brazil against Samarco, Vale, and BHP Brasil. More than 600,000 claimants are seeking damages in relation to the tailings dam failure.
BHP, which has a market capitalisation of $220 billion, and Vale will both pay 50% of claimants in the English, Netherlands, and other proceedings in Brazil covered by the agreement without any admission of liability for these proceedings.
The company adds that the agreement reinforces the terms of a previously undertaken framework agreement, which both companies entered into in 2016.
Under the framework agreement, BHP Brasil and Vale will each contribute 50% to the funding of the Renova Foundation for compensation of the people impacted by the Fundão Dam failure where Samarco is unable to contribute that funding.
In December 2022, BHP brought a contribution claim against Vale because the English proceedings were not brought against the company.
The contribution claim maintains that if BHP’s defences are not successful and it is ordered to pay damages to the claimants in the English proceedings, Vale should contribute to any amount payable.
As a result of the latest agreement, BHP will withdraw its contribution claim against Vale.
BHP Brasil is continuing to support the local remediation efforts in Brazil through the Renova Foundation, including US$3.5 billion in compensation and direct financial aid relating to the dam failure to 430,000 people, as of 31 May 2024.
Write to Aaliyah Rogan at Mining.com.au
Images: Flickr, Romerito Pontes
