BHP, Vale Offer Brazil $25.7 Billion Payment for Dam Disaster

Mining giants BHP Group and Vale SA offered to pay Brazil about $25.7 billion in total compensation for a 2015 tailings dam disaster at their joint-venture iron ore complex.

The offer comes as the companies and Brazilian authorities renew negotiations that broke down last year. Brazil had been seeking 155 billion reais ($43 billion) to cover reparations, compensation and other damages.

BHP and Vale’s offer is split into three tranches, including a $14.4 billion cash payment made “over an extended period of time, well in excess of a decade,” to Brazil’s government and the states of Minas Gerais and EspĂ­rito Santo, BHP said in a statement on Monday.

“The negotiations between the parties are ongoing and no final agreement has been reached on the settlement amount or terms,” the company said.

The offer comes as BHP seeks a takeover of rival Anglo American Plc, in what could end up being the biggest mining deal in a decade.

The proposed payment would be made primarily by the Samarco joint-venture, with Vale and BHP picking up the remaining bill as secondary obligors.

Sizable payments to organizations and communities have already been made, while BHP retains a provision of $6.5 billion for future obligations. Vale holds a provision of $4.2 billion related to the dam collapse.

The Samarco Mariana Mining Complex’s tailings dam collapsed in 2015 causing deaths and large scale environmental destruction. Vale and BHP are also facing a parallel UK class action lawsuit, involving as many as 700,000 people.