A Brazilian court has ruled that iron ore producer Samarco, along with its owners Vale and BHP, must pay a total of $9.7 billion in compensation for a dam collapse that caused one of Brazil’s worst environmental disasters. The incident occurred in November 2015 when a structure holding mining waste ruptured near the town of Mariana in Minas Gerais state. The collapse resulted in the loss of 19 lives, the destruction of nearby villages, and the contamination of waterways stretching all the way to the Atlantic Ocean.
The court’s ruling holds the three companies responsible for the collective “moral damages” suffered by the victims of the incident. This includes non-material harm such as emotional distress. The judgment was issued in response to a civil action brought by state-level and federal public prosecutors, who initially filed a lawsuit demanding $155 billion in compensation after the Mariana disaster. Despite attempts to reach an out-of-court settlement, the companies and public authorities were unable to come to an agreement after years of negotiations.
Samarco is a joint venture between Brazil’s Vale and Australian group BHP, with each holding a 50% stake. The company resumed operations and the production of iron ore pellets in Brazil at the end of 2020. Vale, however, stated that it had not been officially notified of the court’s decision but acknowledged that it could be appealed. The news caused Vale’s shares to drop by 2.2% on Thursday evening, resulting in a market capitalization of $62.9 billion for one of the world’s largest mining companies.
Vale also mentioned that it will continue to contribute to the non-profit Renova foundation, which was established in 2016 as part of an initial agreement between the companies and public authorities. The foundation is responsible for carrying out repairs and providing financial redress. According to its website, Renova has already distributed $34.8 billion. BHP and Samarco declined to comment on the court’s ruling.
The Mariana disaster brought international attention to the safety record of the mining industry. Both BHP and Vale are facing a parallel class-action lawsuit in the UK, with potentially 700,000 claimants. This incident occurred five years after another tailings dam owned by Vale collapsed in the same state near the town of Brumadinho, resulting in 270 fatalities.
The court’s decision to order Samarco, Vale, and BHP to pay $9.7 billion in compensation serves as a significant step towards holding mining companies accountable for their actions. It highlights the importance of ensuring the safety and environmental impact of mining operations. The ruling also brings attention to the ongoing legal battles faced by these companies and the need for stricter regulations in the mining industry to prevent similar disasters from occurring in the future.
While the companies involved have the option to appeal the court’s decision, it is clear that they will face significant financial consequences for their role in the dam collapse. The compensation awarded will hopefully provide some relief to the victims and aid in the restoration of the affected areas. However, it is crucial that efforts continue to focus on preventing such incidents and improving safety measures within the mining industry to protect both human lives and the environment.
