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Damages claims from fatal Brazil dam burst rise to more than $12 billion

08 December 2015

The November dam burst at the Samarco iron ore operation in Minas Gerais, Brazil, has triggered a civil lawsuit seeking 20 billion reais ($5.31 billion) in environmental and property damages. The Brazilian National Humanitarian Society (Sohumana) filed the lawsuit against mine operator Samarco Minerao and its joint owners, BHP Billiton of Australia and Vale SA of Brazil.

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Stock image

Vale SA announced the news in a filing on December 7. Brazil's federal and state governments have also said they will sue Samarco and its owners for $7.2 billion after the Fundão and Santarém tailings dams burst and unleashed 60 million cubic meters of mud and mine waste that devastated a village, killed at least 13 people (with a further six unaccounted for) and polluted a major river valley.

Drinking water supplies for a quarter of a million people have had to be closed off.

In a speech to the climate change summit in Paris, president Dilma Rousseff blamed the disaster on the "irresponsible action of a company".

"We are severely punishing those responsible for this tragedy," she said.

The government lawsuit seeks at least $7.2 billion that would be administered by a private fund over 10 years for environmental recovery and compensation.

Samarco would be required to set up the fund to be managed independently by non-governmental groups, including a committee of inhabitants of the Rio Doce river basin and environmental organisation Instituto Terra.

BHP, whose shares have fallen 20% since the dam burst, said it would consider the matters raised in the court documents "in due course".

Samarco has already been fined $90 million by Brazil's environmental agency, Ibama, for the disaster, which covered the flood plain in mud for 80 kilometres. The company says it is continuing to work with Government authorities in Brazil to relocate displaced people from temporary accommodation to rented housing. Relocation is expected to be completed in February 2016.

BHP has said the mud is "not hazardous to human health, based on the hazard classification of the material under Brazilian standards."

The United Nations earlier this month said the breached dam caused environmental damage across 850 kilometres.

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