By Pierre Bertrand
BHP's Brazilian subsidiary, mining peer Vale and the companies' joint venture Samarco are proposing a nonbinding indicative settlement worth around $25.7 billion relating to the failure of the Samarco dam in 2015.
The proposed settlement comes amid negotiations on obligations, claims, and how to resolve the incident which caused flooding in Brazil's Minas Gerais state.
Under the terms of the proposal, the companies' joint venture Samarco will act as the primary obligor. In the event that the company can't fund it, Vale and BHP Brasil would each assume half of the settlement amount, BHP said on Monday.
The proposal includes $7.7 billion already invested on remediation and compensation and $14.4 billion to be paid over more than a decade to Brazil's federal government, the states of Minas Gerais and Espirito Santo and to relevant municipalities.
It also includes $3.6 billion in obligations by Samarco and the Renova Foundation.
The settlement proposal is within BHP Brasil's provision for the dam failure, which stood at $6.5 billion as of the end of last year, the company said.
In January, the Federal Court of Brazil ruled collective moral damages from the failure of the dam at more than $9.7 billion.
BHP said negotiations between the parties are continuing and no final agreement has yet been reached on the settlement amount or terms.
Write to Pierre Bertrand at pierre.bertrand@wsj.com
(END) Dow Jones Newswires
04-29-24 0959ET
