BHP reaches $45b settlement with Brazil over dam disaster

Mining giant BHP has reached a $45b settlement with the Brazilian government over the 2015 Samarco dam disaster.

The payout is one of the largest environmental settlements in history.

Nineteen people were killed when 43 million tons of mining waste was released into the environment and nearby local villages when the mine’s Fundao tailings dam collapsed on November 5, 2015.

The sludge contaminated the Doce River and devastated the livelihoods of impacted communities around Mariana in the Brazilian province of Minas Gerais.

The mining giant will be required to pay public authorities, affected communities and Indigenous people billions of dollars each year until 2043 as part of the agreement.

In a statement to ASX, BHP chief executive officer Mike Henry said the Samarco Fundão dam failure was a terrible tragedy that should never have happened, and must never be forgotten.

Mr Henry said BHP have always been committed to supporting Samarco to do what’s right by the Brazilian people, communities, organisations, and environments affected by the dam failure.

“The signing of a comprehensive agreement with the Brazilian government and public authorities is an important reflection of that commitment,” he said.

Mr Henry said the agreement would provide additional programs for the environment and funding for the health system, economic recovery, infrastructure and compensation for the farmers, fishermen and Indigenous communities.

BHP had engaged in negotiations with Brazilian authorities since 2021 to reach the settlement.

The negotiations were conducted by the Brazilian Federal Court and the National Court of Justice in Brazil.

Compensation will fund programs to benefit people, communities and the environment in areas that were affected by the disaster including water sanitisation, economic recovery, improvements to roads and infrastructure, flood response along with programs to foster fishing and biodiversity.

Money will also be allocated to supporting women, education, culture, sports and food security.

The agreement does not resolve other legal action brought against BHP in Australia and the UK or legal action take against Vale and Smarco entities in the Netherlands.

BHP is Australia’s second largest company and boasts a market capitalisation of $213bn.

The company mines predominantly iron ore, copper and coal.