London’s High Court rules BHP liable for the 2015 Fundao dam collapse in Brazil that killed 19 people and caused widespread environmental damage.
LONDON: BHP is liable for the 2015 collapse of a dam in southeastern Brazil, London’s High Court ruled on Friday, in a lawsuit the claimants’ lawyers previously valued at up to 36 billion pounds ($48 billion).
Hundreds of thousands of Brazilians, dozens of local governments and around 2,000 businesses sued BHP over the collapse of the Fundao dam in Mariana, southeastern Brazil, which was owned and operated by BHP and Vale’s Samarco joint venture.
Brazil’s worst environmental disaster unleashed a wave of toxic sludge that killed 19 people, left thousands homeless, flooded forests and polluted the length of the Doce River.
A separate claim against Vale was filed in Dutch courts in 2024 on behalf of nearly 1,000 businesses and more than 77,000 individuals hit by the dam break.
Judge Finola O’Farrell said in her ruling that continuing to raise the height of the dam when it was not safe to do so was the “direct and immediate cause” of the dam’s collapse, meaning BHP was liable under Brazilian law.
BHP said it would appeal against the ruling and continue to fight the lawsuit.
BHP’s President Minerals Americas Brandon Craig said in a statement that 240,000 claimants in the London lawsuit “have already been paid compensation in Brazil”.
“We believe this will significantly reduce the size and value of claims in the UK group action,” he added.
RBC Capital Markets analyst Marina Calero said a final resolution was unlikely before 2030, with significant uncertainty around which claims would ultimately be considered valid.
“Based on BHP’s estimates of overlap with Brazil’s compensation scheme, Vale and BHP could each face roughly $2.2 billion in additional payments,” Calero said in a note, adding that BHP’s new provision of $500 million implied a 35% chance of an adverse outcome.
CLAIMANTS CELEBRATE MAJOR RULING
Gelvana Rodrigues da Silva, who lost her seven-year-old son Thiago in the flood, said in a statement: “Finally, justice has begun to be served, and those responsible have been held accountable for destroying our lives.”
“The judge’s decision shows what we have been saying for the last 10 years: it was not an accident, and BHP must take responsibility for its actions,” she added.
The claimants’ lawyers accused BHP, the world’s biggest miner by market value, of “cynically and doggedly” trying to avoid responsibility as the mammoth trial began in October.
BHP contested liability and said the London lawsuit duplicated legal proceedings and reparation and repair programmes in Brazil.
In the trial’s first week, Brazil signed a 170 billion reais ($31 billion) compensation agreement with BHP, Vale and Samarco, with BHP saying nearly $12 billion has been spent on reparation, compensation and payments to public authorities since 2015.
BHP said after Friday’s judgment that settlements in Brazil would reduce the size of the London lawsuit by about half.
A second trial to determine the damages BHP is liable to pay is due to begin in October 2026.
($1 = 0.7451 pounds)
($1 = 5.4039 reais) – Reuters
