BHP and Vale agree to pay damages over Brazil dam collapse

Bengaluru — Mining giant BHP said on Friday it had reached a deal with Brazilian peer Vale to split equally the cost of any damages related to proceedings in Britain over a 2015 dam collapse in Brazil that killed 19 people, while denying liability for related claims.

BHP Group (UK) and its Anglo-Australian parent BHP are defendants in a group action claim in the English High Court, brought by more than 600,000 claimants seeking damages for the Fundao Dam failure.

The collapse of the tailings dam, which stored mining waste and is owned by the Samarco joint venture between BHP and Brazilian iron ore mining giant Vale, killed 19 and spilt about 40-million cubic metres of toxic sludge into communities, the Rio Doce river, and Atlantic Ocean 650km away.

BHP and Vale will each pay 50% of any amount potentially payable to the claimants in the UK proceedings, the Netherlands proceedings, and others in Brazil covered in the agreement, the company said on Friday.

It reinforces the framework agreement signed in 2016 for BHP Brazil and Vale to each contribute 50% to the funding of the Renova Foundation, which was set up to ensure full and fair remediation for the damages caused by the dam collapse.

“BHP believes the English proceedings are unnecessary because they duplicate matters already covered by the existing and ongoing work of the Renova Foundation and legal proceedings in Brazil,” the company said.

BHP will continue to defend the UK proceedings and does not consider that it is liable to the related claimants, it added.

In March, a new claim was filed against Vale and the Dutch subsidiary of Samarco in the Netherlands in which BHP is not a defendant, BHP said.

Since the UK proceedings were not brought against Vale, BHP had filed a contribution claim against Vale in December 2022, which has now been withdrawn due to the new agreement.

“The effect of the agreement is that should BHP ultimately be found to have any liability to the claimants in the UK claims, or should Vale ultimately be found to have any liability to the claimants in the Netherlands, such liability would be shared equally between BHP and Vale,” Vale said in a separate statement.

Pogust Goodhead, a UK-based law firm which represents the claimants, said despite the agreement between the two miners, nothing changes for its clients taking action against the mining companies in England and the Netherlands.

Reuters