Brazilian mining company Vale and BHP are advancing negotiations for an agreement with Brazil over the 2015 collapse of the Samarco Fundao iron ore tailings dam.
Both companies are negotiating the definitive terms of the resolution, following several offers and counteroffers over the months. The agreement includes a R170bn ($30bn) payment, Vale said on 18 October.
The two have already paid R38bn of the sum, while R100bn would be paid in installments over 20 years to Brazil's federal government, the Espirito Santo and Minas Gerais states and their municipalities, and the remainder would be disbursed under performance obligations by Samarco, a joint venture between ore miner Vale and BHP, including "initiatives for individual indemnification, resettlement, and environmental recovery."
In a separate statement, BHP stressed that Samarco would be the primary party bound to the settlement obligations, and that BHP Brasil and Vale are each "secondary obligors of any obligation that Samarco cannot fund or perform."
Vale noted that the negotiations are ongoing, and that no final agreement has been signed. Brazilian president Luiz Inacio Lula da Silva said in September the government expected to reach an agreement with the companies by October.
Vale and BHP have been facing claims from hundreds of victims of the collapse of the dam, located in Minas Gerais state, that killed 19 people and caused environmental damage in the region in 2015.
Analysts at BTG Pactual bank said that the agreement's resolution would cause investors' focus "to shift back toward Vale's operational performance, which has been improving."
