Compensation stoush: BHP says Vale must share costs of $9b dam collapse lawsuit

Mining giant BHP has launched a legal claim demanding its partner in a Brazilian iron ore joint venture be forced to share liability if it loses a multibillion-dollar court case in London over a fatal dam collapse in 2015.

BHP, the largest Australian miner, on Friday filed its defence against the class-action lawsuit in the English High Court brought by more than 200,000 Brazilian claimants demanding compensation of at least £5 billion ($9 billion).

The devastation from the 2015 Fundao tailings dam collapse stretched for hundreds of kilometres.Credit:AP

BHP said it denied the claims “in their entirety” because it believed they duplicated legal action already under way in Brazil, as well as ongoing reparations and repairs. The company has also filed a “contribution claim” calling for its joint-venture partner, Brazilian miner Vale, to be forced to contribute to any damages if BHP loses the court case.

“The contribution claim is a necessary procedural step given that Vale was not included as a defendant to the English proceedings,” BHP said on Monday.

The lawsuit in the English High Court centres on the bursting of the Fundao tailings dam in Mariana, which BHP jointly owned with Vale through their 50:50 Samarco venture. The dam collapse killed 19 people, spewed millions of tonnes of waste into the local waterways and is considered to be Brazil’s worst-ever environmental disaster.

Previously, a lower court in the UK had ruled in favour of BHP in determining that the case should not be allowed to proceed in both countries at the same time.

In July, however, the UK’s Court of Appeal overturned that earlier ruling, finding that the overlap between the class action with Brazilian legal proceedings to be “relatively limited”. It also said compensation being paid in Brazil, in numerous instances, appeared inadequate to date.

“The vast majority of claimants who have recovered damages have only received very modest sums in respect of moral damages for interruption to their water supply,” the Court of Appeal’s judges said. “The claimants should be permitted now to proceed with the claims in the action.”

BHP on Monday said it remained committed to working with Samarco and Vale to support the local remediation efforts in Brazil through the Renova Foundation, established in 2016 to progress remediation and compensation programs for the environment and communities affected by the Samarco tragedy.

“Those efforts have already provided approximately $US2.3 billion in compensation and direct financial aid in relation to the dam failure to 388,000 people to 30 June 2022,” the company said.

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