Brumadinho Mine Disaster: Vale Agrees $7 Billion USD Reparation Settlement

9 Feb 2021 by The Water Diplomat

Mining company Vale SA has reached agreement with the government of Minas Gerais in Brazil to pay $7 Billion USD to compensate the state for socioeconomic and environmental damage caused by the collapse of one of its trailings dams in January 2019 which killed 270 people, also polluting rivers with toxic slurry and devastating swathes of local countryside and infrastructure.

Further Water Diplomat coverage of the Brumadinho disaster

The sum, agreed 4 February, is in addition to compensation already paid and outstanding through individual claims and is separate from the ongoing criminal case against Vale, its inspection contractor TÜV Süd and 16 of the company’s executives.

According to the government of Minas Gerais, the settlement is the biggest in Brazil’s history. The state had originally lodged a claim for $10.3 Billion USD.

Ahead of the announcement, Brazilian advocacy group The Movement of Those Affected by Dams (MAB) denounced the manner in which the agreement was reached, arguing that the reparations agreed did not include representation of those directly affected by the disaster, the people of the Paraopeba river basin.

Media reports quote the governor of Minas Gerais, Romeu Zema, as saying that around 30 Percent of the $7 Billion USD will be invested in the city of Brumadinho.

According to a statement issued by Vale, the sum agreed includes “resources for the government of the state of Minas Gerais to carry out the urban mobility program and the public service strengthening program,” understood to refer to plans for building roads, hospitals and schools that will not directly benefit the communities of Brumadinho.

In the same statement, Vale’s CEO, Eduardo Bartolemeo, said: “Vale is committed to fully repair and compensate the damage caused by the tragedy in Brumadinho and to increasingly contribute to the improvement and development of the communities in which we operate. We trust that this Global Settlement is an important step in that direction. We know that we have work to do and we remain firm in that purpose, in line with our New Pact with Society.”

While investigations are still ongoing into the cause of the disaster, a panel of experts concluded in 2019 that the technical factors leading to the collapse of the dam included liquefaction of the solid materials that made up its structure.

Speaking to Reuters last year, federal prosecutor Edison Vitorelli claimed that 29 trailings dams used by Vale to store mining waste still present elevated safety risks. Six dams in particular have been identified as high risk.

Those charged with homicide and environmental crimes in the ongoing criminal case, including Vale’s former CEO Fabio Schvartsman, are accused of systematically hiding evidence of safety concerns, retaliating against auditing firms that flagged problems and that TÜV Süd was compensated for knowingly presenting Vale with misleading reports about dam stability.