Mining Giants Ordered to Pay Nearly $10 Billion Over Brazil Dam Disaster That Killed 19 People

By Jace Dela Cruz

Jan 26, 2024 01:39 AM EST

A federal judge in Brazil has ordered mining giants BHP, Vale, and their iron ore joint venture Samarco to pay 47.6 billion reais ($9.67 billion) in damages over a deadly dam collapse in 2015. 

(Photo : Douglas Magno/AFP via Getty Images)
View of mud after a dam burst in the village of Bento Rodrigues, in Mariana, Minas Gerais state, Brazil on November 6, 2015

Fundão Dam Collapse in Brazil

According to BBC, the failure of the Fundão dam in southeastern Brazil led to a mudslide that resulted in the loss of 19 lives and extensive pollution of the Rio Doce River, which affected the passageway to its outlet in the Atlantic Ocean.

Judge Vinicius Cobucci declared the companies accountable for "moral damages," or non-material harm like emotional distress experienced by the affected individuals. 

The granted sum, adjusted for inflation since 2015, will be placed in a state fund dedicated to projects and initiatives in the area affected by the dam disaster.

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Financial Liability of the Mining Companies

The distribution of the financial liability among the implicated mining companies remains unclear, with each firm having the option to challenge the ruling.

Vale told BBC the Renova Foundation, utilized by the companies to make compensation payments, has already disbursed 34.7 billion reais as of December last year.

Australia's BHP, Brazil's Vale, and their joint venture Samarco faced increased public scrutiny after the dam burst. A 2016 report commissioned by BHP and Vale found design flaws in the Fundão dam in Minas Gerais state.

A change in the dam's design between 2011 and 2012 reportedly led to less efficient water drainage and eventually to the dam's collapse on November 5, 2015.

The report also highlighted the occurrence of "liquefaction," in which the sand in the dam walls became saturated and suddenly behaved more like a liquid.

The report added that there was also a minor earthquake that day that may have "accelerated" the failure. The incident ultimately prompted a reevaluation of safety policies in the mining sector. 

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