Thursday, July 29

Miner Vale says value of Samarco settlement not open to renegotiation

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SAO PAULO — Brazilian iron ore miner Vale SA said on Monday in a securities filing that the compensation value for “not repairable damage” stemming from a dam collapse in 2015 has already been set and is not subject to renegotiation.

The statement comes in response to a Reuters story published on Friday that said Brazilian prosecutors are looking for a new definitive agreement and consider the current framework, putting damages at around 20 billion reais ($3.80 billion), insufficient.

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The settlement relates to a dam collapse at the Samarco iron ore mine near the town of Mariana in the Brazilian state of Minas Gerais – widely regarded as the country’s largest ever environmental disaster. It released enough thick red sludge to fill about 12,000 Olympic swimming pools, flattened an entire village, killed 19 people and left hundreds homeless.

The Samarco mine is a joint venture between Vale and BHP Group.

The lead prosecutor had declined to say how much more they were looking for, but referenced a benchmark of 155 billion reais – a figure based on a previous lawsuit relating to the disaster.

In 2016, the companies agreed on an initial settlement with prosecutors which created a foundation through which to repair damages and a complicated chronology for payments.

“The amount to compensate for the not repairable damage caused by the Fundão dam rupture has already been stipulated and is not subject to renegotiation,” Vale said in the securities filing.

Vale said one of the main points of negotiation over a final settlement were focused on the “debureaucratization of governance.” ($1 = 5.2579 reais) (Reporting by Nayara Figueiredo; Editing by David Gregorio)

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