BHP, Vale face $62b lawsuit over Brazil dam collapse

  • 04/05/2016
BHP, Vale face $62b lawsuit over Brazil dam collapse

Federal prosecutors in Brazil have filed a 155 billion-real (NZ$62.87 billion) civil lawsuit against iron miner Samarco and its owners, Vale SA and BHP Billiton, for a collapsed tailings dam in November that killed 19 people and polluted a major river.

The 359-page lawsuit, which is also against the two states affected by the spill and the federal government, is the result of a six-month investigation led by a task force set up after the disaster, prosecutors said in a statement on Tuesday.

Vale said it had not been notified of the suit and was therefore unable to comment. BHP did not immediately respond to a request for comment.

The total damages, prosecutors said, were calculated based upon the cost of the Deepwater Horizon oil spill in the US. BP's total pre-tax charge for that spill reached US$53.8 billion.

Prosecutors demanded an initial payment of 7.7 billion reals.

The civil action is separate from the lawsuit that Samarco, Vale and BHP settled with Brazil's government in March in which the companies would pay an estimated 20 billion reals for damage caused by the spill.

Federal and state prosecutors did not form part of that settlement.

The settlement itself was criticised by prosecutors, who said 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".

The roles of the state and federal government were also questioned, with prosecutors accusing the state of Minas Gerais, where the spill occurred, as being guilty of negligence in the permitting and monitoring of the dam.