Mariana settlement talks face new hurdles

The biggest ever litigation case in Brazil’s mining sector still faces hurdles before any settlement can be reached.

The legal battle is over the 2015 Mariana disaster, when a tailings dam operated by iron ore pellet maker Samarco – a Vale-BHP joint venture – collapsed killing 19 people and causing the country’s biggest environmental tragedy, with mining waste polluting rivers and reaching the Atlantic Ocean.

The attorney general’s office and representatives of Minas Gerais and Espírito Santo, the two states affected by the incident, have been negotiating with Samarco, Vale and BHP eyeing record damages of 140bn reais (US$25bn).

"One of the major points of disagreement is that the federal government wants there to be a clause in this accord leaving open the possibility that in the future some of the compensation will be open to renegotiation to make sure it is adequate," a person with knowledge of the talks told BNamericas, asking not to be named.

"Legally speaking, this is unfeasible because companies cannot give the government a blank check and leave open potential future costs without any calculation." 

Another point of conflict is a political issue. The federal government and the government of Minas Gerais do not have a good relationship, which is hindering efforts to find common ground. 

"There is a political dispute currently between the mines and energy minister, Alexandre Silveira, and Minas Gerais governor Romeu Zema, who are political rivals and both want to have a leading role in the talks on an agreement," added the source.

British law firm Pogust Goodhead has filed suits in the UK and the Netherlands on behalf of dozens of affected municipalities, representing some 700,000 people. Pogust Goodhead is demanding 230bn reais in damages.

The parallel action in European courts has been criticized by mining companies since the incident took place in Brazil.