Mining giants Vale, BHP, and their joint venture Samarco have presented Brazilian authorities with a settlement proposal related to reparations for the 2015 Mariana tailings dam burst. However, local prosecutors are still seeking a higher amount from the companies.
The proposal, as outlined by Vale in a securities filing, foresees a total payment of 127 billion reais ($24.88 billion), including 37 billion reais already disbursed. Of the remaining amount, 72 billion reais would be paid to the federal and local governments over a period, and 18 billion reais would be used to settle future obligations.
The November 2015 dam collapse at the Samarco iron ore mine near Mariana in Brazil’s southeastern state of Minas Gerais caused a vast flow of mud and mining waste that buried a nearby village, killing 19 people and leaving hundreds homeless. The disaster also polluted a major river.
While the companies’ proposal represents a substantial amount, the top prosecutor of Minas Gerais state, Jarbas Soares Junior, is not satisfied with the final offer and is hoping to push the firms to raise their offer to 137 billion reais.
Soares Junior stated that the companies are asking for a 20-year term for everything, and adding another 500 million reais per year would not be a significant sacrifice for them.
Vale had previously stated that it expected to reach a final agreement regarding the collapse of the dam by the end of the first half of 2024. Soares Junior reaffirmed this expectation, indicating that the companies and authorities remain committed to advancing negotiations and approving a definitive agreement.
The settlement proposal comes after Vale and BHP struck an initial deal over the disaster in 2016, which created a foundation to implement reparations but had a complicated chronology for payments and left space for a final definitive agreement.