MELBOURNE (dpa-AFX) - In light of recent press articles regarding the negotiations for a definitive settlement related to the Fundao dam collapse in Mariana, Minas Gerais, Brazil, Vale S.A. (VALE) confirmed Friday that Samarco, BHP Brasil, and the company, along with the Brazilian Federal Government, the State Governments of Minas Gerais and Espírito Santo, and various public entities are currently evaluating the general terms for the settlement.
The general terms under discussion outline a total financial commitment of approximately R$ 170 billion, aimed at addressing past and future obligations to support the individuals, communities, and environment affected by the dam failure. This includes three main components: R$ 38 billion already invested in remediation and compensation measures; R$ 100 billion to be paid in installments over 20 years to the Federal Government, the States of Minas Gerais and Espírito Santo, and municipalities, which will fund compensatory programs and actions linked to public policies; and R$ 32 billion in performance obligations by Samarco, encompassing initiatives for individual indemnification, resettlement, and environmental recovery.
Vale noted that the negotiations between the Parties are ongoing and, therefore, no final agreement has been signed.
Vale reaffirmed its commitments to supporting Samarco on repairing the damage caused by the Fundao dam collapse and to the shareholders' previously agreed obligation to finance, up to a 50% share, the amounts that Samarco may eventually fail to fund as the primary obligor. Considering the financial value under consideration, and based on preliminary cash outflow expectations, Vale estimates that R$ 5.3 billion or US$ 956 million will be added to liabilities associated with Mariana's reparation in the third quarter of 2024 results.
In July 2024, Vale, a Brazilian metals and mining company, announced that it entered into a confidential deal with BHP Billiton Brasil Ltda., BHP Group (UK) Ltd., and BHP Group Ltd. (BHP.AX, BLT.L, BBL, BHP) in connection with the action proceedings in the UK and the Netherlands related to the Fundao Dam rupture in Brazil in 2015.
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