Vale Faces Legal Action Over Mariana Dam Disaster: Latest Developments

AM Editorial Team

Vale SA, a mining group, is facing a £3bn lawsuit in the Netherlands due to the Mariana dam collapse that occurred in Brazil in 2015. The collapse resulted in one of Brazil’s worst environmental disasters and led to the pollution of hundreds of kilometres of waterways, killing 19 people. The lawsuit is being brought by law firms Pogust Goodhead and Lemstra Van der Korst against Vale SA and Samarco Iron Ore Europe, a marketing arm of the Samarco joint venture between Vale and BHP that operated the dam.

The Dutch case is a new front in legal action against Vale and BHP, as a huge class action representing 700,000 claimants is already being pursued in the UK against BHP after the rupture of the Fundão mining waste dam near Mariana, southeast Brazil. The Dutch case is being brought on behalf of almost 1,000 businesses, seven municipalities, and 77,000 individuals. Pogust Goodhead, which is also involved in the UK case, said that preliminary work indicated it would request compensation of more than £3bn in the Dutch case.

As part of the Dutch claim, Pogust Goodhead has secured an “asset attachment” over shares in Amsterdam-based Vale Holdings BV owned by its Brazilian parent, preventing the subsidiary from paying dividends or selling shares until a final ruling. In February 2023, Vale Holdings BV made a “dividend distribution in kind” to Vale in the form of $1.5bn of share buybacks. Pogust Goodhead believes this kind of transaction will be blocked by the asset attachment.

Vale said it “remains committed to supporting the full reparation of the damages caused by the Fundão dam collapse”. Under an initial deal with Brazilian authorities, BHP and Vale agreed to fund the Renova Foundation, a non-profit organisation set up to provide compensation to affected communities. It has so far distributed about R$35.5bn ($7bn).

The UK legal case, the country’s largest-ever class action, is due to start in October. BHP has requested that Vale also be found liable for any resulting damages. A decision about Vale’s liability is expected around the time of the main ruling. In January, Samarco, Vale, and BHP were ordered by a Brazilian court to pay R$47.6bn in compensation for the dam collapse. Vale and BHP have both said they would consider appealing.

Pogust Goodhead, which is funded by US investment manager Gramercy and Brazilian investment firms Prisma Capital, Vinci Partners, and Jive Investments, stands to win 30 per cent of individual damages and 20 per cent from municipalities if the Dutch case succeeds. In the UK case, Pogust Goodhead and the Brazilian law firms that have brought the case stand to earn as much as 30 per cent of the settlement if their case is successful.

The Mariana dam collapse is considered an environmental disaster, and the legal action against Vale and BHP seeks to hold them liable for the damages and losses incurred by the affected claimants. The legal cases in the UK and the Netherlands are significant as they represent a global effort to hold mining companies accountable for their actions and to seek reparations for the damage they cause. The initiatives taken by the claimants and their legal representatives show that there is a growing awareness and concern about environmental disasters and their impact on people and the environment.