Vale S.A. (VALE) announced that the company, along with Samarco and BHP Billiton Brasil Ltda, reached a significant settlement with Brazilian authorities, including the federal government, the state governments of Minas Gerais and Espírito Santo, as well as federal and state public prosecutors and defenders, among other public entities. This agreement addresses claims stemming from the Fundao dam collapse in Mariana, Minas Gerais, Brazil, on November 5, 2015.
The settlement outlines a comprehensive financial commitment totaling approximately R$ 170 billion. These funds are intended to meet both past and future obligations for those affected by the disaster, encompassing individuals, communities, and the environment.
The settlement is categorized into three main financial allocations: R$ 100 billion is designated for installment payments over a span of 20 years to the federal government, states of Minas Gerais and Espírito Santo, and local municipalities. This allocation is intended to finance compensatory programs and initiatives related to public policies. Another R$ 32 billion is allocated for Samarco's performance obligations, focusing on individual indemnification, resettlement efforts, and environmental recovery. The remaining R$ 38 billion accounts for the investments already made in remediation and compensation efforts.
Samarco is expected to fulfill certain responsibilities, including implementing a voluntary and simplified individual indemnification process, advancing environmental recovery of the Doce River, and completing community resettlements, which have reached approximately 94% completion as of September 30, 2024. Consequently, some programs managed by the Renova Foundation will be transitioned to Samarco or the authorities, while others will be concluded. The governance structure of the Renova Foundation will be dissolved upon finalization of this agreement.
Vale reiterated its dedication to supporting Samarco in remedying the damage caused by the Fundão dam collapse. Additionally, Vale remains committed to its shareholder agreement to financially support Samarco, covering up to a 50% share of any potential shortfall in Samarco's funding responsibilities. As of September 30, 2024, Vale has recorded a US$4.7 billion provision for these obligations, which includes estimates of Samarco's contributions.
