BHP, Vale and Samarco Propose $26 Billion Settlement for Brazil Dam Failure — 2nd Update
By Pierre Bertrand
BHP's Brazilian subsidiary, mining peer Vale and the companies' joint venture Samarco are proposing a nonbinding indicative settlement worth around $25.7 billion relating to the failure of the Samarco dam in 2015.
The proposal comes amid negotiations on obligations, claims, and on resolving the incident which caused flooding in southeast Brazil.
The Samarco tailings dam, used to hold water and discarded mineral waste from a nearby mine, failed in November 2015 and devastated communities situated below. The failure caused deaths, submerged homes, buried vehicles and overran communities with mud and water.
Under the terms of the proposal announced Monday, the companies' joint venture Samarco will act as the primary obligor. In the event that the company can't fund it, Vale and BHP Brasil would each assume half of the settlement amount, BHP said.
The proposed settlement includes $7.7 billion already invested on remediation and compensation through the Renova Foundation, set up in the aftermath to compensate for damages caused by the dam failure. That sum includes around $3.5 billion paid in indemnities and in emergency assistance to around 430,000 people, BHP said.
Monday's proposal also includes $14.4 billion to be paid over more than a decade to Brazil's federal government, the states of Minas Gerais and Espirito Santo and to relevant municipalities, as well as a further $3.6 billion in obligations by Samarco and the Renova Foundation.
The settlement proposal is within BHP Brasil's provision for the dam failure, which stood at $6.5 billion as of the end of last year, BHP said.
In January, the Federal Court of Brazil ruled collective moral damages from the failure of the dam at more than $9.7 billion.
BHP said negotiations between the parties are continuing and no final agreement has yet been reached on the settlement amount or terms.
It added that approximately 85% of the resettlement cases resulting from the dam break were completed.
BHP said that BHP Brasil remained committed to supporting remediation and compensation efforts through the Renova Foundation.
Write to Pierre Bertrand at pierre.bertrand@wsj.com
(END) Dow Jones Newswires
April 29, 2024 11:39 ET (15:39 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.-
These Stocks Are (Still) Powering the Bull Market
-
5 Undervalued Energy Stocks to Play the AI Data Center Demand Boom
-
After Earnings, Is Lowe’s Stock a Buy, Sell, or Fairly Valued?
-
5 Stocks With the Largest Fair Value Estimate Cuts After Q1 Earnings
-
10 Stocks With the Largest Fair Value Estimate Increases After Q1 Earnings
-
Markets Brief: Inflation Back in the Spotlight
-
AI Is Booming, but Consumer Spending Is Slowing. Which Will Prevail in the Stock Market?
-
What’s Happening In the Markets This Week
-
3 Dividend Stocks for June 2024
-
After Earnings, Is Alibaba Stock a Buy, Sell, or Fairly Valued?
-
MongoDB Earnings: Slashing Valuation as Execution and Macro to Blame for Lower Guidance
-
Marvell Earnings: We Raise Our Medium-Term AI Forecast and Bring Our Valuation Up to $75
-
Zscaler Earnings: Impressive Traction in Emerging Products Drives Sales Growth for the Quarter
-
Dell Earnings: Raising Valuation on Strong AI, but the Stock Remains Severely Overvalued
-
After Earnings, Is Nvidia Stock a Buy, Sell, or Fairly Valued?
-
The 10 Best Companies to Invest in Now