A comprehensive agreement has been finalised between the Federal Government of Brazil, the states of Minas Gerais and Espírito Santo, public prosecutors, and public defenders (collectively, the Public Authorities) and Samarco, BHP Brasil and Vale (collectively, the Companies). The agreement was signed in Brasília in October 2024 and provides reparation for the impacts of Samarco’s Fundão dam failure in November 2015 and builds on the existing remediation and compensation work already performed by the Renova Foundation in Brazil. The total agreement value is R$ 170 billion¹ (US$ 31.7 billion²) which incorporates amounts already invested to date plus future payments and obligations³.

In addition to providing funding to the federal and state governments to continue ongoing environmental recovery, Samarco is also responsible for continuing the Renova Foundation's sustainability projects

Reached between public authorities and the companies (Samarco, BHP Brasil and Vale) in October 2024, the new agreement expands socioenvironmental remediation efforts following Samarco's Fundão dam failure, allocating over R$16 billion to government entities, in addition to Samarco's direct reparation obligations.

The federal government will receive R$8.1 billion, while the states of Minas Gerais and Espírito Santo will both receive R$3 billion for environmental improvement projects. An additional R$1 billion has been allocated for each state for flood prevention measures.

In assuming responsibility for activities previously managed by the Renova Foundation, Samarco will continue restoring springs and Permanent Preservation Areas (APPs). The company’s obligation is to restore 5,000 springs and 43,000 hectares of APPs in Minas Gerais and Espírito Santo, with R$ 1.7 billion allocated for reforestation.

The agreement also provides support for the creation of the Doce River Mouth Environmental Protection Area and the consolidation of federal conservation units, under the responsibility of the federal government. The recovery of the Doce River, the water quality of which has already returned to pre-dam failure levels, remains a focus. Water quality monitoring will continue at 84 points in the basin.

To enable universal sanitation in the basin that addresses issues beyond the impacts of the dam failure, Samarco will allocate R$11 billion to the state governments, with R$7.54 billion for Minas Gerais and R$3.46 billion for Espírito Santo. These funds will be used for water supply projects, solid waste management and large-scale drainage, focusing on structuring concessions and Public-Private Partnerships, as well as public works to expand sewage systems and wastewater treatment plants.

The removal of tailings in the Risoleta Neves Hydroelectric Plant (Candonga) reservoir and the Dique S4 dam is also stipulated as Samarco's responsibility. At Candonga, the requirement is to dredge up to 9.15 million cubic meters of tailings. At Dique S4, there will be partial decommissioning, with lowering of the impoundment and recovery of the degraded area. Studies will be conducted to assess the toxicity of the remaining tailings at Dique S4 and to propose mitigation measures if necessary, but without additional dredging or total decommissioning.

As a shareholder in the Samarco non-operated joint venture, BHP Brasil remains committed to supporting Samarco as it works to deliver on its obligations as part of the new agreement and finalize definitive support for those affected by the dam failure.

¹ All financial obligations are presented on a real, undiscounted basis and will accrue inflation at IPCA inflation rate. Payments will be made in Brazilian Reais.
² All USD amounts throughout are calculated based on actual transactional (historical) exchange rates related to funding provided to Fundação Renova (Renova Foundation) for investment to date and future spend is calculated using 28 June 2024 BRL/USD exchange rate of 5.56.
³ Under the Settlement Agreement, Samarco is the primary obligor for the settlement obligations and BHP Brasil and Vale are each secondary obligors of any obligation that Samarco cannot fund or perform in proportion to their shareholding at the time of the dam failure, which is 50% each.