Brazil Files Civil Suit Against Samarco, Vale, BHP Over Dam Disaster

By Paul Kiernan 

RIO DE JANEIRO--Brazil's government filed a civil lawsuit Monday against mining company Samarco Mineração SA and its parents, Vale SA and BHP Billiton Ltd., in response to a massive dam failure at a Samarco iron-ore mine on Nov. 5.

In the lawsuit, which was announced Friday, public attorneys are seeking 20.2 billion Brazilian reais ($5.2 billion) over 10 years from the companies, including an immediate deposit of 2 billion reais. Their objective is to finance compensation for the thousands of people affected by the disaster and efforts to restore the Rio Doce river basin, which was flooded with mud and mine waste.

The companies weren't immediately available for comment. Upon learning of the government's plan to sue the companies, Vale said on Saturday: "We are surprised by the path chosen by the federal government and that of Espírito Santo and Minas Gerais states, given that Vale, BHP and Samarco have displayed an openness to dialogue."

As a guarantee, government attorneys asked a federal judge to set aside 50% of the net profit or 20% of the annual revenue of Samarco--whichever is greater--for a special fund. If Samarco is unable to foot the bill, they requested that Vale and BHP Billiton be required to pay.

Samarco, a joint venture between Vale and BHP, reported gross revenue of 7.6 billion reais in 2014.

As many as 13 people were killed and hundreds displaced as the mud swallowed up entire villages below the dam.

Authorities quickly suspended Samarco's operating licenses in the days following the accident, and analysts say it could be years before the company regains those permits.

Write to Paul Kiernan at [e-mail]

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November 30, 2015 20:21 ET (01:21 GMT)

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