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BHP Group Faces Substantial Collective Moral Damages Following Brazilian Federal Court Decision

Tinashe Mupasiri



BHP Group addressed media reports surrounding a decision by the Federal Court of Brazil concerning a BRL$155 billion (approximately US$32 billion) claim by the Federal Public Prosecution Office.

The claim, filed in May 2016, targeted Samarco Mineração S.A., Vale S.A., and Billiton Brasil Ltda (BHP Brasil), seeking reparation, compensation, and collective moral damages related to the Fundão tailings dam failure in November 2015.

The Federal Court of Brazil, in an interlocutory decision, quantified collective moral damages at BRL$47.6 billion (US$9.7 billion), excluding interest and inflation. The court directed Samarco, Vale, and BHP Brasil to pay these damages once all appeals are resolved.

BHP Brasil, yet to receive the court decision, expressed its commitment to reviewing the implications and potential for appeal, emphasizing ongoing negotiations expected to resume in February 2024. The Group’s provision related to the Samarco dam failure, as of June 30, 2023, stands at US$3.7 billion.

Despite legal challenges, BHP Brasil remains devoted to supporting remediation and compensation efforts in Brazil through the Fundação Renova, a not-for-profit foundation established after the Fundão tailings dam failure. The foundation focuses on implementing 42 remediation and compensatory programs in Brazil. The financial details, including provisions and contingent liabilities, are outlined in BHP’s 2023 Annual Report.

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