BHP liable for 2015 Brazil dam collapse, UK court rules in mammoth lawsuit

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.

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.”