What Happened During 2015 Brazil Dam Disaster? Mining Companies Agree To Pay $30 Billion In Settlement

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The 2015 Brazil dam collapse devastated multiple villages and destroyed homes, marking Brazil’s worst environmental disaster. Now, mining companies BHP and Vale have reached an agreement with the Brazilian government to pay close to $30 billion (£23 billion) in compensation for the incident.

Brazilian President Luiz Inácio Lula da Silva attended the signing ceremony on Friday.

Nineteen lives lost

The dam breach released toxic mud and waste that inundated nearby towns, rivers, and forests. Nineteen lives were lost, hundreds of people were displaced, and the river was contaminated.

President Lula expressed his hope that the mining companies had learned a valuable lesson, remarking that disaster prevention would have been less costly than the aftermath.

The dam, managed by Samarco—a joint venture between Vale and BHP—led to both companies setting up a foundation to compensate affected people. This initiative has invested billions in repairs, including constructing a new town to replace one that was destroyed.

However, many community members still argue that, nine years later, they haven’t received adequate justice or the means to rebuild their lives.

Legal actions by Brazil

In a separate legal battle, over 620,000 people have taken BHP to court in the UK, where BHP was previously headquartered. This trial, which started this week, aims to determine if BHP can be held liable as the parent company. Additionally, around 70,000 plaintiffs are pursuing a case against Vale in the Netherlands.

Both companies maintain their stance that the international legal actions are redundant and duplicate the ongoing proceedings in Brazil.

Some residents of Mariana explained to the BBC that they joined the UK case out of frustration with the slow progress of Brazilian proceedings. They also suspected that international pressure from the UK case might accelerate a settlement in Brazil.

Brazil delayed negotiations

An initial agreement of about $3.5 billion (adjusted to today’s rate) was reached in 2016, but negotiations reopened in 2021 due to delays in Brazil’s judicial system.

The recent agreement covers both past and future obligations to support individuals, communities, and ecosystems impacted by the disaster. It outlines payments of 100 billion reais ($17.5 billion; £13.5 billion) to local authorities over the next 20 years, with an additional 32 billion reais directed towards victim compensation, resettlement, and environmental recovery. The remaining 38 billion reais represents the amount the companies report they have already paid in compensation.

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