Samarco And Owners BHP, Vale Slapped With $43.5B Lawsuit Over Brazil’s Fatal Dam Burst

Brazilian mining company Samarco Mineração SA, along with its owners Vale SA and BHP Billiton Ltd., is facing a 155 billion reais ($43.5 billion) civil lawsuit brought in by Brazilian prosecutors Tuesday for the November 2015 dam burst. The fatal incident is considered Brazil’s worst environmental disaster.

Brazilian prosecutors have demanded an initial payment of 7.7 billion reais (over $2 billion) from Samarco, Vale and BHP within 30 days. According to the prosecutors, the total damages were calculated based on the cost of the 2010 Deepwater Horizon oil spill in the U.S. on the BP-operated Macondo Prospect. BP’s total pretax charge for the spill reportedly reached $53.8 billion.

BHP, the Australian owner of Samarco, said in a statement Wednesday it did not receive any formal notice of the claim. However, the company said it was “committed to helping Samarco to rebuild the community and restore the environment affected by the failure of the dam.”

In March, Samarco agreed to pay $6.2 billion in damages for the dam tragedy in a separate lawsuit the three companies settled with the Brazilian government. The mining company would pay $1.1 billion for investments aimed at providing compensation for irredeemable losses over the next three years and the remaining $5.1 billion will go to the cleanup costs and damages following the disaster. The agreement is yet to receive a court approval.

“We believe that the Agreement [once approved by the court] provides the long-term remedial and compensation framework for responding to the impact of the Samarco tragedy and the appropriate platform for the parties to work together,” BHP said.

The federal prosecutors also challenged the March settlement saying it was insufficient and short of the legal mechanisms to ensure the companies would perform their obligations, making it little more than a “letter of intent,” Reuters reported.

The dam burst, which occurred on Nov. 5, 2015, caused thick red mud to roll down the hilly area, killing 19 people. The mining waste buried lorries and cars while the burst caused significant damage to the environment. The cause of the incident is not yet known.