Home » News » International News » Brazil seeks $44 billion in civil suit over spill at BHP-vale dam

Brazil seeks $44 billion in civil suit over spill at BHP-vale dam

epa05182286 The headquarters of Brazilian company Vale in Rio de Janeiro, Brazil, 26 February 2016. Brazilian mining giant Vale reported losses of over 12 billion US dollars for 2015 due to lower iron ore prices, depreciation of the Brazilian Real and the Mariana mining accident, when an iron ore tailings dam burst, allowing toxic waste to spill into surrounding areas, killing 17 people.  EPA/Antonio Lacerda

 

Bloomberg

Brazilian prosecutors filed a 155 billion reais ($44 billion) civil suit against Vale SA, BHP Billiton Ltd. and their iron-ore venture over a November dam rupture that killed as many as 19 people and caused severe environmental damage.
The prosecuting task force is demanding the two companies and Samarco Mineracao SA provide initial payment of 7.8 billion reais within 30 days, according to a statement from the prosecutor’s office.
The civil suit also challenges a previous agreement the companies signed with Brazil’s federal government and the Minas Gerais and Espirito Santo state governments.
Samarco had been making progress at overcoming what authorities describe as Brazil’s biggest environmental disaster before the lawsuit was filed.
In March, Samarco, Rio de Janeiro-based Vale and Melbourne-based BHP struck a deal with the Brazilian governments, committing to pay as much as 12 billion reais over 15 years.
President Dilma Rousseff officially presided over the event, praising the companies and the administration for reacting quickly to address the damage caused.
Deepwater Precedent
The prosecutors allege in Tuesday’s statement that state and federal agencies failed to provide the oversight necessary to avoid such a disaster.
“This action is much more extensive” than the previous agreement with the governments, prosecutor Eduardo Aguiar said on Tuesday. “It includes not just the three companies but the federal government, both state governments and also various
agencies.”
Vale’s €750 million ($861 million) bonds due January 2023 lost 5.5 cents, the biggest drop on record, to 84.2 cents on the euro. BHP’s 1.25 billion-euro bonds due April 2076 declined 0.7 cents to 103.8 cents on the euro, according to data compiled by Bloomberg.

Civil Suit
The amount sought in the prosecutors’ civil suit was based on costs to repair the damage caused by the 2010 Deepwater Horizon oil-spill disaster in the Gulf of Mexico, according to the statement. The Brazilian suit includes more than 10,000 pages of technical reports and more than 200 claims related to ecological, economic and social damages.
Prosecutors said the total value of the damages is an estimate and will be assessed by an independent technical team. In Brazil, prosecutors have a history of demanding large reparations for environmental disasters that are then reduced. Chevron Corp. was one party targeted by multibillion-dollar suits for 2011-2012 offshore oil spills, and eventually settled for a fraction of that amount.
BHP and Vale have said they would like the Samarco iron-ore operations to safely resume as soon as is technically feasible. Tuesday’s announcement comes after Samarco set a goal to partially restart later this year. The joint venture’s chief executive officer, Roberto Carvalho, has said he expects the mine to reopen in the fourth quarter.
Operations have been suspended since the dam burst caused a wave of mud to bury the district of Bento Rodrigues and clog the Rio Doce river in Minas Gerais state before the sludge traveled to neighboring Espirito Santo state.

Leave a Reply

Your email address will not be published. Required fields are marked *

Send this to a friend