In response to recent media coverage about the ongoing negotiations for a conclusive settlement regarding the Fundão dam collapse in Mariana, Minas Gerais, Brazil, Vale S.A. (VALE) confirmed that discussions involve Samarco, BHP Brasil, Vale, the Brazilian Federal Government, and the State Governments of Minas Gerais and Espírito Santo, along with various public entities. They are currently reviewing the overall terms of the proposed settlement.
The proposed terms under negotiation involve a total financial commitment of approximately R$ 170 billion, intended to meet both past and future obligations for the benefit of individuals, communities, and the environment affected by the dam collapse. This financial package comprises three main elements: R$ 38 billion that has already been invested in remediation and compensation efforts; R$ 100 billion, which is to be paid in installments over 20 years to the federal government, the States of Minas Gerais and Espírito Santo, and local municipalities to support compensatory programs and public policy initiatives; and R$ 32 billion dedicated to Samarco's performance obligations, which include initiatives for individual compensation, resettlement, and environmental restoration.
Vale emphasized that the negotiations between the involved parties are ongoing, and no final agreement has been reached at this stage.
Vale reaffirmed its commitment to assisting Samarco in addressing the repercussions of the Fundão dam collapse and confirmed its shareholders' prior agreement to fund up to 50% of any shortfall that Samarco may face as the primary responsible entity. Considering the financial implications and based on preliminary cash flow projections, Vale anticipates that R$ 5.3 billion, or approximately US$ 956 million, will be added to liabilities related to the Mariana disaster in the third quarter of 2024 financial results.
In July 2024, Vale, a prominent Brazilian metals and mining company, disclosed that it has entered into a confidential agreement with BHP Billiton Brasil Ltda., BHP Group (UK) Ltd., and BHP Group Ltd. concerning legal proceedings in the UK and the Netherlands associated with the 2015 Fundão dam failure in Brazil.
