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.

The New Doce River Basin Agreement, ratified by the Brazilian Supreme Court (STF), will deliver over R$11 billion in funding for improvements in basic sanitation, representing a strengthened commitment to environmental recovery and socioeconomic development in the region.

The agreement was the result of negotiations between the federal and state governments, public prosecutor's and defender’s offices, and the companies (Samarco, BHP Brasil and Vale). The Agreement finalizes a new delivery and governance model to address the impacts of Samarco’s Fundão dam failure in November 2015.

Minas Gerais will receive R$ 7.5 billion and Espírito Santo will receive R$ 3.4 billion for sanitation related projects. The resources will be used in water supply, sewage treatment, solid waste management and macro-drainage projects, with the objective of universalizing access to these services in the Doce River Basin and on the northern coast of Espírito Santo as well as Anchieta (ES).

Commenting on the components of the new agreement that provide funding beyond reparation commitments, Guilherme Tângari, Head of Sustainability at BHP Brasil said the companies’ have a shared, ongoing commitment to the health, wellbeing and development of communities in the region.  

“The new agreement signed with public authorities includes 20 additional years of action by the companies to remediate the impacts of Samarco’s Fundão dam failure,” Guilherme said. “For BHP Brasil, supporting projects that deliver tangible improvements for communities in the basin is an important priority.”

“In addition to providing this new funding to the state governments, Samarco will complete the water supply construction works and projects initiated by the Renova Foundation. The company is also responsible for developing definitive water supply solutions for locations that currently depend on water trucks” Guilherme said.

The agreement also provides for the transfer of approximately R$620 million for sanitation projects and programs in the municipalities listed in the agreement. Part of these funds will be managed by the development banks of Minas Gerais (BDMG) and Espírito Santo (BANDES) and part will be directly managed by the municipalities. These funds were originally overseen by the Renova Foundation and represent the remaining amount available from the R$850 million of the former Sanitation Program from Renova.

Monitoring the water and sediment quality of the Doce River remains under Samarco's oversight for the next 15 years and will continue to generate important data for monitoring environmental recovery and supporting water resource management decision-making.

The governance of sanitation resources will be shared between the Federal Government and the states through steering committees that select and approve projects. The structuring of concession projects and Public-Private Partnerships (PPPs) will be prioritized, seeking to optimize resources and the sustainability of services.

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.