Brazilian Judge Orders Mining Giants to Pay $9.7 Billion for Dam Disaster

A federal judge in Brazil has issued a landmark ruling, instructing mining giants BHP, Vale, and their Samarco joint venture to pay 47.6 billion reais ($9.67 billion) in damages for the catastrophic dam burst in 2015. The collapse of the Fundão dam in the southeastern region of Brazil led to a devastating mudslide that claimed the lives of 19 individuals and caused severe pollution in the Rio Doce river, impacting its flow into the Atlantic Ocean.

Judge Vinicius Cobucci, presiding over the case, determined that the companies – BHP, Vale, and Samarco – are liable for “moral damages,” encompassing non-material harm, such as emotional distress endured by those affected by the tragic incident. The awarded amount, subject to inflation adjustments since 2015, is designated for a state fund, intended for projects and initiatives in the area directly affected by the dam collapse.

This ruling is the outcome of a civil action initiated by state and federal public prosecutors. The specific financial responsibility of each company was not immediately clarified. The judgment permits the companies to appeal the decision.

Samarco, a joint venture split equally between Australian mining group BHP and Brazil’s Vale, has been grappling with the repercussions of the 2015 disaster, which displaced 700 people and is considered one of Brazil’s worst environmental catastrophes. The deluge of toxic mud not only wiped out the village of Bento Rodrigues but also left a lasting impact on the Rio Doce river and the Atlantic Ocean, affecting wildlife and contaminating drinking water for hundreds of thousands.

Vale informed the BBC that it had not been officially notified of the ruling. As of December last year, the Renova Foundation, utilized by the companies for compensation payments, has disbursed 34.7 billion reais. BHP and Samarco have yet to respond to requests for comments.

The collapse of the Fundão dam in 2015 was attributed to design flaws, according to a report released in 2016, commissioned by Samarco’s joint owners BHP and Vale. The alterations in the dam’s design between 2011 and 2012 led to less efficient water drainage, culminating in the dam’s failure on November 5, 2015. The dam’s walls, comprised of sand-like particles and clay-like silt, experienced liquefaction, exacerbated by a small earthquake on the day of the disaster.

This verdict comes amid ongoing legal challenges for BHP and Vale, including a class action lawsuit in the UK involving over 700,000 claimants. In January 2019, Vale faced another dam collapse in the state of Minas Gerais, near Brumadinho, resulting in 270 fatalities.