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A Brazilian court has ordered iron ore producer Samarco along with its owners Vale and BHP to pay R$47.6bn ($9.7bn) in compensation for a dam collapse that triggered one of the country’s worst environmental catastrophes.
The accident occurred in November 2015 when a structure holding mining waste ruptured near the town of Mariana in Minas Gerais state.
It unleashed an avalanche of mud that killed 19 people, devastated surrounding villages and contaminated hundreds of kilometres of waterways all the way to the Atlantic Ocean.
A federal judge on Thursday issued a ruling that held the three companies liable for collective “moral damages” — non-material harm such as emotional distress — suffered by victims of the incident.
The judgment was handed down in response to a civil action brought by state-level and federal public prosecutors. After the Mariana disaster they had originally filed a lawsuit demanding R$155bn in compensation.
The companies had been attempting to reach an out-of-court settlement with public authorities, but the efforts hit an impasse after years of wrangling.
Samarco is a venture controlled 50-50 by Brazil’s Vale and Australian group BHP. It restarted operations and the production of iron ore pellets in Brazil at the end of 2020.
Vale said it had not been notified of the court decision, but noted that it could be appealed. Its shares were down 2.3 per cent on Thursday evening, giving one of the world’s largest miners a market capitalisation of $62.9bn.
The Rio de Janeiro-based company said it continued to contribute funds towards the non-profit Renova foundation. Set up to carry out repairs and provide financial redress under an initial deal in 2016 between the companies and public authorities, Renova has distributed R$34.8bn, according to its website.
BHP and Samarco declined to comment.
The Mariana disaster sparked international scrutiny of the mining industry’s safety record. BHP and Vale face a parallel class action lawsuit in the UK with as many as 700,000 claimants.
Five years ago, another tailings dam owned by Vale collapsed in the same state near the town of Brumadinho, resulting in 270 fatalities.
Additional reporting by Beatriz Langella