Vale Reaches Settlement With Brazilian Authorities For Complete Reparation Of Samarco's Dam Collapse

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(RTTNews) - Vale S.A. (VALE) said that the Company, Samarco and BHP Billiton Brasil Ltda, together with the Brazilian Federal Government, the State Governments of Minas Gerais and Espírito Santo, the Federal and State Public Prosecutors' and Public Defenders' Offices and other Brazilian public entities reached a definitive and substantial settlement of claims related to the Fundao dam collapse in Mariana, Minas Gerais, Brazil, on November 5, 2015.

The Definitive Settlement establishes a total financial commitment of approximately R$ 170 billion to address past and future obligations for those affected by the dam failure, including individuals, communities, and the environment.

The settlement amount is divided into three main categories: R$ 100 billion allocated for installment payments over 20 years to the Federal Government, the States of Minas Gerais and Espirito Santo, and municipalities, aimed at funding compensatory programs and actions related to public policies; R$ 32 billion designated for performance obligations by Samarco, which includes initiatives for individual indemnification, resettlement, and environmental recovery; and R$ 38 billion that reflects amounts already invested in remediation and compensation measures.

Vale noted that Samarco will execute certain obligations, including a voluntary-based, simplified individual indemnification system, measures towards the Doce River environmental recovery and the completion of community resettlements, which already reached around 94% of total cases to be delivered as of September 30, 2024. Hence, part of the Renova Foundation's 42 programs will be gradually transferred to Samarco or the authorities, while the remaining programs will be closed. The Renova Foundation's governance body will cease on signing.

Vale reaffirmed its commitments to supporting Samarco in repairing the damage caused by the Fundão dam collapse and to the shareholders' previously agreed obligation to finance, up to a 50% share, the amounts that Samarco may eventually fail to fund as the primary obligor. Vale's provision recorded for those obligations is US$4.7 billion as of September 30, 2024, and includes estimates of Samarco's contributions.