Vale gets stung with $9 billion fine over Brazil mining disaster

One of the world’s largest mining companies has been slapped with a huge multibillion-dollar fine for the worst industrial accident in Brazil’s history.

One of the world’s largest mining companies Vale has been slapped with a $9.1 billion compensation payout after a disaster at one if its mines in Brazil.

Around 270 people were killed and 11 people are still missing after the Brumadinho Dam collapsed two years ago on January 25, 2019.

About 12 million cubic metres of sludge was unleashed on the surrounding area after bursting with waste water from the iron ore mine in the town of Brumadinho.

The dam’s collapse also caused damage to the surrounding environment including irreparable pollution of the entire Doce River basin.

The mining company will pay $9 billion in compensation for the disaster that took place in 2019. Picture: Miguel Schincariol/AFP

“The president of the Supreme Court has approved the historic agreement,” the court said on Thursday.

The agreement with the government of the state of Minas Gerais is the largest in Brazilian history.

“Vale is committed to fully repair and compensate the damage caused by the tragedy in Brumadinho and to increasingly contribute to the improvement and development of the communities in which we operate,” CEO Eduardo Bartolomeo said in a statement.

It took rescuers weeks to uncover the missing bodies in the dam’s sludge. Picture: Mauro Pimentel/AFP

“We did it,” Minas Gerais state governor Romeu Zema posted on Twitter after the trial.

Mr Zema said about 30 per cent of the settlement will be invested in the city of Brumadinho.

Several employees were arrested after the event and charges against the mining group were brought to the courts for allegedly giving authorities false information on the stability of the dam despite knowing that it was not secure.

Prior to the incident, the company enjoyed global success as the fourth largest mining company in the world. Vale is also the second most-traded share in Brazil’s stock exchange, making it a key player in the country’s economy.

However, the company lost a quarter of its market value – nearly $19 billion – within days of the disaster in 2019.

The collapse of the dam at the Brumadinho mine killed 270 people. Picture: Mauro Pimentel/AFP

In the days following the disaster, former Vale chief executive Fabio Schvartsman, who was charged after the incident, said the company’s safety procedures had not worked. He also evaded questions about why Vale had not yet paid fines owed for a prior 2015 incident.

Mr Schvartsman told reporters the company was “a Brazilian jewel” that “cannot be condemned for an accident that happened in one of its dams – even though it was such a big tragedy”.

Hundreds died and 11 bodies are still missing. Picture: Mauro Pimentel/AFP

His statement drew angry responses from Brazilian politicians.

It took weeks to recover bodies from the sludge. As loved ones were laying victims to rest, Vale reportedly pledged a donation of $37,350 to each family, but locals were not interested in the compensation.

The 2019 disaster came after another mining dam in the Minas Gerais state burst in November 2015, inundating the small village of Mariana and killing 19 people.