Brazil's Vale to pay $7 bn in damages for deadly 2019 dam collapse

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In this file photo taken on January 28, 2019 firefighters receive equipment to open a vehicle found in the mud as they search for victims of a dam collapse at an iron-ore mine belonging to Brazil's giant mining company Vale near Brumadinho in the state of Minas Gerais, southeastern Brazil

Brazilian mining giant Vale said Thursday it has agreed to pay more than $7 billion in damages over the 2019 collapse of a dam at its Brumadinho mine, which killed 270 people.

It is the largest ever damages agreement in Latin America, according to the government of Minas Gerais, the southeastern state where the disaster sent millions of tons of toxic waste gushing into the surrounding area.

Vale said it would pay both "socio-economic" and "socio-environmental" reparations, compensating families hit by the disaster and funding projects to repair the surrounding environment, including a massive clean-up of the Paraopeba river.

"This agreement seals Vale's commitment to fully compensate for Brumadinho and support the development of Minas Gerais," the company said in a statement.

The state government said the amount negotiated via mediation -- 37.7 billion reais -- was an initial estimate and that the company would have to pay more if necessary.

"The agreement requires Vale to fully repair all environmental damage. The above-mentioned amount... could be increased if necessary," it said in a statement.

The January 2019 disaster was one of the worst industrial accidents in Brazilian history. It obliterated a huge swathe of territory around the mine in Brumadinho, a municipality home to around 40,000 people.

For Vale, the disaster was devastating.

The company reported a net loss of $1.68 billion for 2019, calling it "the most challenging year of its history" because of Brumadinho.

Brazilian prosecutors charged 16 people, including Vale's ex-president Fabio Schvartsman, with intentional homicide and environmental offenses, alleging they hid the risk of a dam collapse.

The deal does not cover the criminal charges stemming from the disaster.

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