Two of the world’s largest mining companies have been given an extra 66 days to negotiate the settlement of multi-billion-dollar public civil claims.
Two of the world’s largest mining companies, BHP Billiton (ASX:BHP,LSE:BLT,NYSE:BHP) and Vale (NYSE:VALE), have been given an extra 66 days to negotiate the settlement of multi-billion-dollar public civil claims over a 2015 mine dam collapse in Brazil.
Nineteen people were killed in November 2015, when an iron ore tailings dam collapsed at the Samarco mine in Brazil.
On top of the human costs, the Doce River was contaminated with 60 million cubic meters of waste in what was Brazil’s worst environmental disaster. BHP Billiton and Vale operated Samarco together as joint venture partners.
Vale announced on Friday (April 20) that the federal court of Minas Gerais, the Brazilian state where the Samarco mine is located, has extended the final date for the negotiation of a final settlement until June 25 of 2018 — an extra 66 days.
The companies are facing two public civil claims worth US$47.6 billion and US$6.1 billion, respectively.
This is the second extension the two companies have received for the claims, following a 150-day extension granted in November 2017.
On top of the huge civil claims, the companies are also facing federal criminal proceedings against 22 individuals who were employed either directly or indirectly by Samarco, 21 of whom face charges of “qualified homicide.”
Public prosecutor Jose Leite Sampaio told reporters in Belo Horizonte back in 2016 that executives at Samarco had clear awareness the dam could fail, but ignored the risks and prioritized profit.
There were signs that the dam was unsafe for several years before its collapse, but Samarco officials, executives, employees and board members appointed by Vale and BHP failed to take proper action, Sampaio said.
Prosecutors also said safety and regulatory procedures were not properly followed, including those in the company’s own operating manual. To this day, operations at the Samarco mine remain suspended.
As of 1:00 p.m. EST on Tuesday (April 24), BHP’s share price was trading on the Australian Securities Exchange at AU$30.86, after trading as low as AU$15.07 in the months after the Samraco disaster in late 2015 and early 2016.
Meanwhile, Vale’s share price was sitting at on the New York Stock Exchange at US$13.88, up from a similar low of US$2.27 in the months following the Samarco disaster.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.