Prosecutors file lawsuit against BHP, Vale dam compensation deal

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Sao Paulo: Brazilian federal prosecutors have filed a lawsuit contesting a compensation package for victims of the 2015 Samarco dam collapse, arguing the package offered by owners BHP and Vale is far too small.

The move comes after prosecutors earlier this month accused the two companies of colluding with a lawyer to reduce compensation for the victims and interfere with a landmark lawsuit against BHP in the UK.

A car and two dogs are seen on the roof of destroyed houses in the small town of Bento Rodrigues, Brazil, after the Samarco dam collapse in 2015. Credit:AP

At a news conference on Thursday (Friday AEDT), the federal prosecutors said the compensation being offered was far too low given the scale of the tragedy. It would also force the victims to waive rights in other indemnity proceedings, such as the £5 billion ($9 billion) British lawsuit.

BHP, the target of the Manchester suit, brought by 200,000 Brazilian people and groups, has called it "pointless and wasteful."

In the 2015 incident, a mining waste dam burst at BHP and Vale's Samarco joint venture near the town of Mariana, releasing a torrent of sludge that killed 19 people. The collapse is also considered the country's worst-ever environmental disaster, contaminating a river for some 600 to the ocean and killing fauna, flora and income-generating activities for locals and indigenous communities.

The prosecutors' appeal is the latest in a series of ongoing lawsuits against Vale and BHP over the disaster, which have caused the companies to set aside multibillion-dollar provisions.

The Renova Foundation, which the companies set up to manage compensation, said that until last month, 10.1 billion reais ($2.4 billion) had been allocated to environmental recovery and compensation. As of August 31, it said, about 2.6 billion reais had been paid in damages and emergency financial aid to approximately 321,000 people.

Vale said it was committed to supporting the Renova Foundation's efforts, adding that programs to repair damages had already received more than 10 billion reais.

BHP did not immediately respond.


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