MS Risk Blog

Brazilian authorities seek $5.2B from Samarco and its co-owners for burst dam

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On November 1, Brazil’s government filed a 7.2 billion dollar lawsuit against the mining company Samarco and its co-owners, Australia’s BHP Billiton and Vale, to clean up the damage caused by the mine catastrophe in state of Minas Gerais.

In a speech to the climate change summit in Paris on Monday, Brazil’s President Dilma Rousseff blamed the disaster on the “irresponsible action of the company”. “We are severely punishing those responsible for this tragedy” she said.

The dam, holding waste water from Samarco mine in south-eastern Brazil, burst on November 5, killing 16 people and injuring 45. The closest village to the dam, Bento Rodrigues, was completely destroyed. The city council had to evacuate about 600 people from the village to higher ground. The mine waste also reached another village called Paracatú de Baixo. There was no warning so residents had to run for their lives as they realised the dam had collapsed.

According to a pair of United Nations experts, the avalanche of mud unleashed by the dam failure contained high levels of toxic heavy metals and other toxic chemicals. These findings contradicted repeated statements by the mining companies responsible for the dam that chemicals released by the accident were harmless. “The scale of the environmental damage is the equivalent of 20,000 Olympic swimming pools of toxic mud waste contaminating the soil, rivers and water system of an area covering over 850 kilometres,” the U.N. agency’s special rapporteur John Knox said in a statement.

Environment Minister Izabella Teixeira said the toxic mud had devastated forests over a large area. The initial reports showed that an area of at least 9 square kilometres of natural vegetation was destroyed. The mud caused destruction along the path of the River Doce, which meets the Atlantic Ocean in the state of Espirito Santo, some 500 kilometres away from the area where the dam collapsed. Teixeira said a full study will be carried out by the Environmental Agency Ibama in 2016, once the rainy season is over. On November 17, Samarco agreed to pay the Brazilian government 260 million dollars in compensation for the disaster. The money will be used to cover initial clean-up and to help the victims and their families.

According to the Brazilian Committee on Dams, the dam breach near Mariana may be the most severe ever recorded in the country. The biggest dam breach recorded before this disaster was in Itabirito, Brazil, in 1986, when 7 people died.

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