BHP, Vale Agree To Pay $30bn Damages For Brazil Dam Disaster

Mining giants BHP and Vale on Friday signed a deal with Brazil's government to pay nearly $30 billion in damages for a 2015 dam collapse that triggered the country's worst environmental disaster.

President Luiz Inacio Lula da Silva attended the signing of the deal over the November 5, 2015 collapse of a tailings dam at a mine in the southeastern town of Mariana, which triggered a giant mudslide.

The river of mud swamped villages, rivers and rainforest, killing 19 people on its way to the sea.

"I hope the mining companies have learned their lesson: it would have cost them less to prevent (the disaster), much less," Lula said at the ceremony attended by representatives of Brazil's Vale and Australia's BHP, co-owners of the Brazilian company Samarco that operated the iron mine.

The agreement, which Lula declared to be the biggest environmental payout in modern history, comes on the fifth day of a separate mega-trial in London over BHP's role in the dam's failure.

More than 620,000 complainants, including 46 Brazilian municipalities and several Indigenous communities, are seeking an estimated GBP36 billion ($47 million) in damages in the civil trial.

BHP denies responsibility.

The company said Friday that the agreement reached in Brasilia did not end the lawsuits pending against the companies, nor prevent others being taken.

The dam's failure released a torrent of over 40 million cubic meters of highly toxic sludge, the equivalent of 12,000 Olympic swimming pools, which coursed through the Doce River all the way to the Atlantic Ocean, over 600 kilometers (373 miles) away.

Five-year-old Emanuele Vitoria was among the people buried by the ocher-colored muck in the village of Bento Rodrigues near Mariana in Minas Gerais state.

"We felt as if our whole world had collapsed," her mother Pamela Rayane Fernandes told AFP ahead of the London trial.

Over 600 people were left homeless.

Scientists say the mouth of the Doce River and parts of the southeast Atlantic coastline are still contaminated with metals from the spill, affecting the area's population of fish, birds, turtles, porpoises and whales.

BHP and Vale had already agreed in 2016 to pay 20 billion reais (about $3.5 billion at today's rate) in damages, but the negotiations were reopened in 2021 due to what the government called their "non-compliance" and the slow progress of Brazil's justice system in resolving the dispute.

Friday's agreement in Brazil, which is subject to approval by the country's Supreme Court, covers the companies' past and future obligations to assist people, communities and ecosystems affected by the disaster.

"The agreement marks a new moment of hope for the people," said Brazil's Attorney General Jorge Messias, who represented the Brazilian state and local authorities in the negotiations.

But some of the victims said they felt the mining giants got off too easily.

"We recognize the importance of the agreement and the advances for those affected (by the disaster), but it has deficiencies," the Movement of People Affected by Dams (MAB) said in a statement.

The group said that the damages agreed were "insufficient to achieve the full reparation of the rights" of the victims, and called for those responsible to be brought to justice.

The companies agreed to pay 100 billion reais (17.5 billion dollars) to local authorities over twenty years and 32 billion reais ($5.6 billion) towards compensating and resettling the victims, as well as repairing the harm caused to the environment.

The remaining 38 billion reais ($6.6 billion) is the amount that the companies say they have already paid in compensation.

In London, the head of the law firm representing the complainants, Tom Goodhead, said the agreement "only serves to underline exactly why the proceedings in the English courts are so critical."

"The victims have not been consulted about the agreement and part of the reparations will be spread over 20 years," he said.

The victims in the London case say BHP, which had global headquarters in Britain and Australia at the time of the spill, let Samarco accumulate too much toxic sludge, which they say contributed to the disaster.

BHP says it cannot be held responsible because it did not own or operate the dam.