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Brazil: dam collapse lawsuit seeks billions from mining companies


Brazil: dam collapse lawsuit seeks billions from mining companies


Federal prosecutors in Brazil have filed a civil lawsuit against iron mining company Samarco and its owners, Vale and BHP Billiton over an environmental disaster last November”:

Nineteen people were killed and a major river polluted with the collapse of a dam used to contain a huge lake of contaminated water from mining operations.

The lawsuit is for damages of 155 billion reals (38 billion euros).

Prosecutors say the amount was calculated following a six-month investigation by an environmental task force and was based on the clear up cost of BP’s Deepwater Horizon oil spill in the US.

Two Brazilian states – Minas Gerais and Espirito Santo – that were affected by the spill and Brazil’s government are also the target of the lawsuit following allegations of negligence in the permitting and monitoring of the dam.

Vale and BHP both said they had not received formal notice of the claim.

However, BHP said in a statement to the Australian Securities Exchange that it was “committed to helping Samarco to rebuild the community and restore the environment affected by the failure of the dam”.

It said that a separate lawsuit that Samarco, Vale and BHP settled with Brazil’s government in March, in which the companies would pay an estimated 20 billion reals (4.9 billion euros), was the best way to repair damage caused by the spill.

“We believe that the agreement (once approved by the court) provides the long-term remedial and compensation framework for responding to the impact of the Samarco tragedy and the appropriate platform for the parties to work together,” BHP said.

Federal and state prosecutors were not involved with that settlement. Indeed they criticised it saying it was insufficient and lacked the legal mechanisms to ensure the companies would fulfil their obligations, making it little more than a “letter of intent”.

This is not the only legal action Vale is facing. A class action lawsuit was filed in New York in December.

BHP Billiton’s share slumped on Wednesday. At one stage they were down nearly 10 percent. Vale’s shares dropped over six percent.

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