Samarco disaster ‘should never have happened’: BHP chief Mike Henry

After a $44bn settlement with Brazilian authorities, criminal charges against Samarco, its owners and some individuals are still unresolved.

BHP, led by CEO Mike Henry, is defending a lawsuit in England lodged by 620,000 Brazilian claimants. Picture: Supplied.

BHP chief executive Mike Henry says the mining giant and its partner Vale have always been committed to doing what’s right by the people of Brazil over the fatal Samarco dam collapse.

Mr Henry was commenting after BHP signing off on a $US30bn ($44bn) settlement with Brazilian authorities thrashed out over years of negotiations on adequate compensation for the 2015 disaster.

The settlement involving Samarco and its co-owners BHP and Vale is expected to see direct and indirect benefits flow to about 500,000 Brazilians and potentially limits BHP’s exposure to lawsuits in other jurisdictions.

BHP is defending a lawsuit in England lodged by 620,000 Brazilian claimants. Pogust Goodhead, the law firm acting on behalf of those claimants, has said BHP may have to pay out up to £36bn ($70bn) if it loses the class action.

Mr Henry said the dam failure was a terrible tragedy that “should never have happened and must never be forgotten”.

“BHP Brasil and Vale have always been committed to supporting Samarco to do what’s right by the Brazilian people, communities, organisations, and environments affected by the dam failure,” he said on Saturday.

“[The] signing of a comprehensive agreement with the Brazilian government and public authorities is an important reflection of that commitment.”

Mr Henry and BHP chief legal, governance and external affairs officer Caroline Cox attended the signing in the capital Brasilia.

BHP has acknowledged settlement does not resolve the UK class action, or similar legal claims in Australia and in the Netherlands, and that it doesn’t spell an end to criminal charges against Samarco, its owners and some individuals.

The tailings dam at the iron ore mine collapsed nine years ago on November 5 in a tragedy that killed 19 people, left hundreds homeless and caused major environmental damage.

The terms of the settlement were flagged a week ago, with Pogust Goodhead labelling the deal a desperate attempt by BHP “to avoid being held accountable in court”.

“It is essential to clarify that most of the resources refer to funds that will be spent by the states (Minas Gerais, where the dam was located, and Espirito Santo) and the federal government, and are not direct compensation to the affected individuals and communities,” the law firm said.

Mr Henry said the settlement package, to be delivered over 20 years, measures aimed at economic and environmental recovery and “extensive compensation”.

“It delivers expanded and additional programs for the environment and for the people, including designated funding for the health system, economic recovery, improved infrastructure and extensive compensation and income support measures, including for farmers, fisher people and Indigenous and traditional communities,” he said.

Under the settlement, about 34 per cent higher than one lobbed by Samarco and its owners in April, 100bn reais will be paid directly to public authorities over 20 years. Another 32bn reais would be in remediation and compensation measures, with individuals and small businesses hit by the dam collapse set to get 30,000 reais per person.

BHP said the settlement proposal was broadly aligned with the existing $US6.5bn provision on its books.

The village of Bento Rodrigues in Brazil in 2023, showing the reconstruction work on a town that was devastated in 2015 as the result of the failure of a tailings dam owned by Samarco, a joint venture between BHP and Vale. Pic supplied by BHP, January 2024.

Originally published as Samarco disaster ‘should never have happened’: BHP chief Mike Henry