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July 20, 2021

Brazil’s Samarco could face $19bn settlement for 2015 dam collapse

The estimate is nearly four times more than the initial settlement deal signed in 2016 by the mining firms.

Minas Gerais governor Romeu Zema has reportedly said the definitive settlement with Samarco for the 2015 tailings dam disaster in Brazil could reach $19.06bn (R$100bn).

The estimate is around four times higher than the initial settlement deal signed in 2016 by Brazil’s Samarco, owners BHP Group and Vale, and prosecutors.

The 2016 deal led to the creation of a foundation to support victims of the fatal dam accident and suspend related lawsuits.

Earlier this month, the lead prosecutor of the dam disaster task force was reported by Reuters as saying that the agreement signed earlier with the mining firms was not effective enough.

The prosecutor also floated a benchmark value of $29.9bn (R$155bn) for future settlements.

Claimed to be the country’s largest-ever environmental disaster, the dam collapse at the Samarco iron ore mine near the town of Mariana left 19 people dead.

As part of ongoing reparations, Vale has already invested $2.4bn (R$13bn) for disbursement and allocated $966.5m (R$5bn) to offset irreversible damages, which is not open to renegotiation.

Zema was cited by Reuters as saying that the final settlement would also look to learn from the settlement deal signed with Vale for the 2019 Brumadinho dam disaster.

Under that deal, Vale agreed to pay $7.17bn (R$37.69bn).

However, the negotiations for the final settlement agreement for the dam disaster would not affect the projects and compensations that are under progress, Reuters reported.

Last month, it was reported that Vale and BHP Group are planning to provide a $238m (R$1.2bn) debtor-in-possession loan to Samarco Mineracao to help maintain its operations and jobs.

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