The owners of an iron ore mine in Brazil where a burst dam spewed a toxic flood, flattening a village and killing 19 people, settled with the government on Wednesday for US$6.2 billion.
Representatives of Samarco — co-owned by Brazil’s Vale iron ore giant and the Anglo-Australian BHP Billiton, the world’s biggest mining company — signed the accord in the capital Brasilia.
Brazilian President Dilma Rousseff said the settlement would help heal “a tragedy without precedent.”
The funds, which are to go toward social and environmental damages, would be paid out over 15 years.
Twenty billion reals (US$5.1 billion) is earmarked for damages and an extra 4.4 billion reals is specifically allocated for investments aimed at providing compensation for irredeemable losses.
Rousseff underlined that the heavy financial costs for Samarco might not end there.
“There will be complete restoration of socio-economic conditions and of the affected environment. And I want to emphasize: There will be no financial limits until there is full reparation,” she said. “We want to build a new life on the ruins.”
The Nov. 5 accident last year near Mariana in Minas Gerais state began when a tailings dam at Samarco’s mine failed, unleashing the flood of polluted water and mud into the River Doce, one of the most important in Brazil.
A village was destroyed, water supplies for hundreds of thousands of people were interrupted and damage reached as far as the river’s mouth on the Atlantic coast, with wildlife, tourism businesses and fishing communities all suffering.
Seventeen people were confirmed killed and two are missing, presumed dead.
BHP Billiton chief executive officer Andrew Mackenzie called the agreement an important step toward recovery and said his company was making a “commitment to repairing the damage caused and to contributing to a lasting improvement in the Rio Doce.”
Paulo Hartung, governor of Espirito Santo state, which also straddles the River Doce, said the toxic flood marked “the biggest environmental disaster in the history of Brazil.”
Last month, police announced homicide charges against six Samarco executives, including the chief executive officer at the time of the accident, and an engineer.
Samarco and its powerful owners could still face further legal difficulties, despite the deal.
Last week, a federal prosecutor said that he would challenge the settlement, arguing that not enough care was taken in assessing the true costs of the disaster.
“How can you define an amount if there are no criteria for evaluating the damage?” Jose Adercio Leite Sampaio said. “Where did they get this number? For us, it’s a magic number... It could be 23 or 24, 30, 40 billion.”
Vale reported last week that it lost US$12.3 billion last year due to lower prices for iron ore, the sharp depreciation of the real, and the deadly accident at the Samarco mine.
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