Brazil states ask court to double what Vale, BHP should pay for dam burst

October 2017 aerial image of the area affected by the tailings dam failure in Mariana, Minas Gerais, Brazil. (Photo by Vinícius Mendonça, courtesy of Brazilian Institute of Environment and Renewable Natural Resources (IBAMA).)

Two Brazilian states have asked a court to more than double the amount that miners Vale and BHP, plus a jointly owned tie-up, must pay in damages for a 2015 deadly tailings dam failure, according to a legal document seen by Reuters on Tuesday.

In January, a Brazilian federal judge ruled that Vale, BHP and their joint venture Samarco must pay 47.6 billion reais in damages for the dam burst, a preliminary decision which prompted Vale and BHP to raise provisions related to the case.

In late 2015, the collapse of the dam, near the town of Mariana, Minas Gerais, at the Samarco iron ore mine, caused a vast flow of mud and toxic mining waste that buried a nearby village, killing 19 people. It also left hundreds homeless while polluting the Doce River, a major waterway that flows through neighboring Espirito Santo state.

According to a legal document filed on Monday, Minas Gerais and Espirito Santo states have asked a court to order Vale and BHP to pay a total 100 billion reais ($19.5 billion), along with interest plus a late payment penalty.

The states argue that a larger payment amount is needed to repair the affected areas, claiming the companies are able to pay more based on their most recent three years of earnings, according to the document.

Also on Tuesday, BHP said in a statement it remains willing to collectively seek a solution to the disaster that would guarantee fair and comprehensive reparation.

Vale declined to comment. Samarco did not immediately respond to requests for comments.

Earlier this month, the Brazilian government and Espirito Santo state rejected a proposal by Vale, BHP and Samarco that offered to pay a total of 127 billion reais. Minas Gerais said it wanted to keep negotiating.

An eventual agreement would conclude several ongoing lawsuits over the incident.

($1 = 5.1289 reais)

(By Marta Nogueira and Andre Romani; Editing by David Alire Garcia and Leslie Adler)


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