Wrap Text
Response to press speculation regarding Samarco
settlement
BHP Group Limited
BHP Group Limited ABN 49 004 028 077
Registered in Australia
Registered Office: Level 18, 171 Collins Street Melbourne VIC 3000
Share code: BHG
ISIN: AU000000BHP4
Exchange release
29 April 2024
Response to press speculation regarding Samarco settlement
BHP notes the recent press speculation in Brazil regarding the status of negotiations in Brazil
between Samarco Mineração S.A. (Samarco), BHP Billiton Brasil Ltda (BHP Brasil) and Vale S.A.
(Vale) and Brazilian Federal and State Government and other public entities relating to the Samarco
dam failure.
As disclosed in BHP's 2023 Annual Report and Half Year 2024 Report, Samarco, BHP Brasil and
Vale have been engaging in negotiations with the Brazilian State and Federal Government and other
public entities to seek a settlement of obligations under the Framework Agreement, the Federal Public
Prosecution Office Claim, and other claims by government entities relating to the Samarco dam
failure.
BHP Brasil's provision for the Samarco dam failure is US$6.5 billion as at 31 December 2023 which
includes the assessment of the estimated costs to resolve all aspects of the Federal Public
Prospection Office Claim and the Framework Agreement obligations.
As part of the settlement negotiations, BHP Brasil, Samarco and Vale have submitted a non-binding,
indicative settlement proposal which is within BHP Brasil's provision for the Samarco dam failure. The
proposal is for a total financial value of approximately R$127 billion (approximately US$25.7 billion 1)
on a 100% basis with Samarco as the primary obligor and a 50% contribution from each of Vale and
BHP Brasil as secondary obligors if Samarco cannot fund. The proposal incorporates amounts
already invested to date plus future payments and obligations as follows:
• R$37 billion (US$7.71 billion) in amounts already invested on remediation and compensation
to date;
• a R$72 billion cash payment (US$14.4 billion1) payable over an extended period of time, well
in excess of a decade, to the Federal Government, the States of Minas Gerais and Espírito
Santo and the relevant municipalities; and
• R$18 billion (US$3.6 billion1) in obligations that will be performed by Samarco and the
Renova Foundation.
The negotiations between the parties are ongoing and no final agreement has been reached on the
settlement amount or terms.
BHP Brasil remains fully committed to supporting the extensive ongoing remediation and
compensation efforts in Brazil through the Renova Foundation. The Renova Foundation has spent
approximately R$37 billion (approximately US$7.71 billion) on comprehensive reparation and
compensation programs to 31 March 2024.
This includes approximately R$17 billion (approximately US$3.51 billion) paid in indemnities and
emergency financial assistance directly to approximately 430,000 people. In addition, approximately
85% of the resettlement cases for the communities impacted by the Samarco dam failure have been
completed.
1 USD amount for investment to date is calculated based on actual transactional (historical) exchange rates
related to funding provided to Fundação Renova (Renova Foundation) and future spend is calculated using 31
March 2024 BRL/USD exchange rate of 5.00.
Further Information
On 5 November 2015, the Fundão tailings dam operated by Samarco failed. Samarco is a non-
operated joint venture owned by BHP Brasil and Vale, with each having a 50 per cent shareholding.
Following the Samarco dam failure, numerous legal proceedings were commenced in Brazil against
Samarco, Vale and BHP Brasil, including the:
• BRL$20 billion Public Civil Claim: In November 2015, the Federal Government of Brazil,
the Federal Government of Brazil, the States of Espírito Santo and Minas Gerais and certain
other public authorities filed a BRL$20 billion (approximately US$5.2 billion at the time) public
civil claim against Samarco, Vale and BHP Brasil for clean-up costs and damages.
• Federal Public Prosecution Office claim: In May 2016, Brazil's Federal Public Prosecution
Office (and 18 other public entities) filed a public civil claim against Samarco, Vale and BHP
Brasil seeking BRL$155 billion (approximately US$43 billion at the time) for reparation,
compensation and collective moral damages in relation to the dam failure.
On 2 March 2016, BHP Brasil, Samarco and Vale, entered into a Framework Agreement with the
Federal Government of Brazil, the states of Espírito Santo and Minas Gerais and certain other public
authorities to establish a foundation (Renova Foundation) that is executing environmental and
socioeconomic programs to remediate and provide compensation for damages caused by the
Samarco dam failure. The Brazilian Federal Prosecutors were not a party to the Framework
Agreement.
In 2018, BHP Brasil, Vale, Samarco, the other parties to the Framework Agreement and the Brazilian
Federal Prosecutors entered into the Governance Agreement, which settled the BRL$20 billion Public
Civil Claim and suspended the Federal Public Prosecution Office Claim. It established a process for
the parties to work together to renegotiate the scope of the programs under the Framework
Agreement and progress towards a final settlement of the Federal Public Prosecution Office Claim.
Since early 2021, the parties have been engaging in negotiations in relation to the review of the
Framework Agreement to seek a definitive and substantive settlement of the Federal Public
Prosecution Office Claim and other Brazilian claims relating to the Samarco dam failure.
Our Half Year 2024 Report and 2023 Annual Report provide further detail on the Samarco dam failure
and BHP's response.
Authorised for release by Stefanie Wilkinson, Group Company Secretary.
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited
BHP Group Limited ABN 49 004 028 077
Contacts
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Megan Hjulfors Monica Nettleton
+1 (403) 605-2314 +1 (416) 518-6293
Renata Fernandez
+56 9 8229 5357
BHP Group Limited
ABN 49 004 028 077
LEI WZE1WSENV6JSZFK0JC28
Registered in Australia
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Melbourne
Victoria 3000 Australia
Tel: +61 1300 55 4757 Fax: +61 3 9609 3015
BHP Group is headquartered in Australia
bhp.com
BHP Group Limited ABN 49 004 028 077
Date: 29-04-2024 02:44:00
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