Brazil’s Vale, Minas Gerais state close to $7 billion disaster settlement

A view of a collapsed tailings dam owned by Brazilian mining company Vale SA, in Brumadinho
FILE PHOTO: A view of a collapsed tailings dam owned by Brazilian mining company Vale SA, in Brumadinho, Brazil February 13, 2019. REUTERS/Washington Alves

February 4, 2021

By Marta Nogueira

RIO DE JANEIRO (Reuters) – Brazilian miner Vale SA and authorities in the state of Minas Gerais said on Wednesday they have defined potential settlement terms regarding a 2019 mining disaster, with a source saying the deal is worth about 37 billion reais ($6.89 billion).

A dam containing mining waste burst in January 2019 at a Vale facility in the town of Brumadinho in Minas Gerais, releasing a torrent of sludge that killed some 270 people.

In a statement, Minas Gerais officials, alongside state and federal prosecutors, said the terms would be further discussed at a meeting set for Thursday, when a deal could potentially be signed. Neither Vale nor the officials commented on the value of the deal.

A person familiar with the negotiations, declining to be identified as the talks are closed, told Reuters the current terms involve Vale spending about 37 billion reais to compensate for the disaster.

Vale shares rose after authorities announced a deal was close and were up more than 3% in afternoon trading, compared with a rise of roughly 1% in the overall Bovespa index.

The deal would require investments by Vale in the area affected by the Brumadinho disaster, state officials said.

The settlement would not stop individual claims against Vale, including criminal lawsuits, from going forward, they said.

In a separate statement, Vale said “a meeting was scheduled Thursday for final agreements and the possible signing of a reparations accord, with investments and actions in the affected regions and population.”

($1 = 5.3684 reais)

(Reporting by Marta Nogueira in Rio de Janeiro; Additional reporting by Gabriel Araujo; Writing by Gram Slattery and Jake Spring; Editing by Richard Chang and Matthew Lewis)

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