BHP's $47 Billion Over Mariana Dam's Collapse.
On November 5, 2015, Brazil experienced its most severe environmental disaster, caused by the failure of a tailings dam at an iron ore mine operated by Samarco, a joint venture between the Brazilian mining company Vale and the Australian firm BHP. A critical hearing regarding a $47 billion lawsuit against BHP related to Mariana dam collapse will commence at London's High Court today.
The High Court in London is set to assess the potential liability of BHP for the disaster, given that the company had its global headquarters in both the UK and Australia at the time of the dam's failure. Over 600,000 Brazilians, 46 municipal governments, and approximately 2,000 companies are taking legal action against BHP, which managed the dam alongside Vale. The catastrophic failure of the dam, designed to contain mining waste (tailings), unleashed a toxic surge that tragically claimed 19 lives, displaced thousands, devastated forests, and contaminated the sacred Doce River, crucial to the Krenak indigenous community.
The dam's failure released a massive surge of more than 40 million cubic meters of extremely toxic mining waste sludge. The ochre-colored sludge from the dam in Mariana has inundated several villages downstream in the state of Minas Gerais. More than 30 towns and villages were impacted, with Bento Rodrigues being among the most severely affected.
The mud from Mariana traveled approximately 670 kilometers down the Doce River to the Atlantic Ocean, causing significant damage to the local ecosystem. As a result, over 6,000 families who relied on fishing lost their source of income.
As the largest mining company globally by market capitalization, BHP disputes its liability. The company argues that this London lawsuit is redundant, duplicating ongoing legal actions and compensation efforts in Brazil. To date, nearly $8 billion has been disbursed to affected individuals through the Renova Foundation, established in 2016. Furthermore, the Brazilian government is in negotiations for a nearly $30 billion compensation agreement involving BHP, Vale, and Samarco.
A distinct legal proceeding involving Samarco's second parent company, Vale, is currently underway in the Netherlands, with approximately 70,000 plaintiffs participating. The two companies have agreed that if either is deemed responsible for damages, they will share the financial cost.
Pogust Goodhead, the law firm representing the claimants, emphasizes that the English lawsuit is "the only means to genuinely hold BHP accountable." Tom Goodhead, CEO of Pogust Goodhead, noted that: "The English claim has pushed BHP into finally accepting they needed to do more in Brazil but this proposed deal only goes half way at best."
BHP has stated it is working with Brazilian authorities and stakeholders to develop a fair compensation and rehabilitation process. The High Court hearings are expected to last up to 12 weeks, focusing on BHP's liability under Brazilian environmental laws and the ability of the implicated municipalities to pursue legal action.
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