Vale and Brazil state sign $7bn deal over Brumadinho

The dam rupture in Brumadinho occurred in January 2019. Credit: Ibama via Flickr.

Vale executives and members of the government of Minas Gerais, Brazil, signed on Thursday a R$ 37.6 billion ($7bn) deal for the reparation of the socio-economic and environmental damage caused by the Brumadinho dam collapse in 2019.

In November, the head of the Brazilian state of Minas Gerais rejected the miner’s proposed settlement of around 21 billion reais ($3.97 billion).

Minas Gerais requested 54.6 billion reals ($10.3 billion) in compensation, a figure that included relocation and the psychological damage suffered by survivors and the victims’ families.

About 30% of the $7 billion will be invested in the city of Brumadinho

Vale argued that it had already paid about 8,700 individual claims and has allocated about R$ 10 billion ($1.83 billion) to repair the damages.

According to the government of Minas Gerais, the settlement is the biggest in Brazil’s history, but does not include criminal actions, unknown damages, and individual rights.

The Movement of Dam Affected People (MAB), which represents the victims, said that it “disagrees with the way in which negotiations for the global agreement have been carried out, without the participation of those affected.”

“Vale has already paid compensation directly to the victims’ families. The settlement is for economic damages caused to the state, and the government of Minas Gerais relies heavily on this money to pay back salaries of state employees, to finance the reelection of the current governor of Minas Gerais Romeu Zema in 2022,” Murilo Rocha, author of the book Brumadinho – The Engineering Of A Crime (Brumadinho – A Engenharia de um Crime), told MINING.COM.

Minas Gerais governor Romeu Zema signs the agreement over the Brumadinho disaster (Credit: Imprensa Minas Gerais)

“The government of Minas Gerais plans to build roads, hospitals, schools with this money, which will not benefit directly the community of Brumadinho,” Rocha said.

According to Zema, about 30% of the $7 billion will be invested in the city of Brumadinho.

The government expects to create 360,000 new jobs in Minas Gerais after the investment.

Investigation

Federal Police in Minas Gerais, Brazil, expect to receive the forensic report by the end of March on the cause of the tailings liquefaction that led to the dam collapse.

In September 2019, Brazilian police indicted Vale, the testing service TÜV SÜD and 13 employees of the two companies for producing misleading documents about the safety of the dam. Each of these crimes can yield from 3 years to 6 years, and can reach a total of 18 years in prison.

In January 2020, Vale SA’s former chief executive officer Fabio Schvartsman was charged with homicide after an investigation conducted by the Minas Gerais police, but the federal investigation is still ongoing and Vale’s lawyers can challenge the charge based on the results of the federal investigation results. Other former employees were also accused of homicide.

Still missing

The Fire Brigade of Minas Gerais resumed the search in August 2020 for still missing bodies of 11 victims of the dam collapse. Work had been halted in March due to pandemic protocols. The operation includes 60 military personnel.

“It is a very complex operation, but we will remain in Brumadinho until we are no longer able to find these victims,” ​​Lieutenant Pedro Aihara told MINING.COM. “This is very important, especially for family members.”

Image: Corpo de Bombeiros de Minas Gerais

Despite the Brumadinho disaster and the Fundão dam tragedy in 2015, Vale has not complied with a number of commitments signed with authorities to prevent a new disaster, federal prosecutor Edison Vitorelli told Reuters.

Twenty-nine dams that Vale uses to store mining waste still present elevated safety risks, according to Vitorelli.

“Brumadinho revealed that several other dams were unsafe,” says Murilo Rocha. “Some small towns have been evacuated, nobody believes that a new disaster can’t happen again, it was clear that the inspection was flawed.”

More News