BHP, Vale in London Court Confrontation over Brazil Dam Damages

LONDON –– Mining giants BHP Group and Vale faced off in a London court on Wednesday over who should accept legal and financial responsibility in a potential 36 billion pound ($47 billion) lawsuit stemming from Brazil’s worst environmental disaster.

Around 720,000 Brazilians are suing the world’s biggest miner by market value BHP, over the 2015 collapse of the Fundao Dam owned by the Samarco joint venture it operates with Brazilian iron ore producer Vale.

BHP, which denies liability, applied in December to have Vale join the case and contribute to damages if they lose, but Vale challenged the London High Court’s jurisdiction to determine the claim. The trial will start in October 2024.

“BHP currently has no right to a ‘contribution’ from Vale under Brazilian law,” said court filings submitted by Vale’s lawyers.

“BHP can have no such right unless and until… it is found liable to the Claimants and makes a payment to them,” the filings added.

Vale also said that having no direct operations in Britain, London is not the appropriate location for the case.

“Has BHP satisfied the court that London is the natural forum for the dispute? The natural forum is Brazil,” Vale’s lawyer Simon Salzedo KC said on Wednesday.

BHP’s lawyers said that if the company is found liable, then Vale should be too, because its relationship with Samarco was equivalent in terms of ownership, control and knowledge to that of BHP’s.

“BHP therefore seek to have Vale share the burden of any such liability, and contribute (50% or more) to any payments made,” the lawyers said in a filing.

When the dam collapsed, 19 people were killed as mud and toxic mining waste swept into the Doce river, obliterating villages, contaminating water supplies and reaching the Atlantic Ocean more than 650 km (400 miles) away.

“Alongside their total failure to provide full and fair compensation to the victims, BHP have also exposed their investors to extraordinary levels of risk in relation to the unprecedented compensation bill they now face,” Tom Goodhead of law firm Pogust Goodhead, which represents the claimants, said in an email.

Reparation and compensation programs implemented by the Renova Foundation, a redress scheme established in 2016 by Samarco and its shareholders, had funded more than $6 billion of rehousing, rehabilitation and indemnification for those affected by the disaster, BHP said.

“BHP Brasil continues to work closely with Samarco and Vale … The 2024 trial will not deal with individual payments or any kind of indemnification,” a BHP spokesperson said.

The lawsuit, one of the largest in English legal history, first began in 2018.

An application to the Supreme Court by BHP to end the case without trial was quashed in June because it did “not raise an arguable point of law,” the court concluded.