Brazil demands immediate US$15.7B payment for Mariana disaster

Brazil’s government is asking Vale (NYSE: VALE), BHP (NYSE: BHP; LSE: BHP; ASX: BHP), and their joint venture Samarco to cough up US$15.7-billion (79.6 billion reais) in compensation for the Mariana tailings dam burst in 2015.

The solicitor general’s office said it will petition the court to block the companies’ assets if they don’t make the payment within 15 days. It filed the request before a federal court in Minas Gerais state on Tuesday.

The companies have only paid about 37 billion reais (US$7.3 billion) so far, and still have not come to an agreement about the total owed.

The dam collapse at the Samarco iron ore mine near the town of Mariana in the 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. It is considered the largest environmental disaster in Brazilian mining history.

The solicitor general’s office said the measures are necessary because the companies “have not yet been properly held accountable and continue to treat the reparation of the tragedy as just another indemnity case.”

The office stated that the companies’ stance is “unacceptable” given the death of 19 people in the disaster and the devastation of the Rio Doce watershed.

Last week, the Brazilian government and the state of Espírito Santo rejected a new compensation proposal presented by the companies.

The miners offered to pay a total of 127 billion reais (US$25 billion) as reparations for the dam collapse, including the amount already paid. That was short of the 155 billion reais (US$30.6 billion) the Brazilian government and affected states have asked for.

According to Brazil’s solicitor general’s office, the offer “did not represent progress compared to the previous proposal,” presented and discussed in December 2023. 

Authorities say the new proposal contains “unacceptable conditions” that disregard what “had already been exhaustively debated and agreed upon” since negotiations began.

According to Brazilian authorities, the recent offer provides for a much lower removal of mining waste from the Rio Doce than what had already been negotiated.