Vale: Mariana deal weakens action in UK – 25/10/2024 – The Daily

Vale understands that the agreement signed on Friday morning (25) to remedy the tragedy in Mariana (MG) weakens the claim for reparations in the United Kingdom, where a trial began this week.

“The agreement here in Brazil reframes the arguments of lawyers in the United Kingdom about an unresolved issue in Brazil,” said vice-president of corporate affairs at mining giant Alexandre D’Ambrosio this Friday. “It’s falling apart.”

Signed in the presence of President Luiz Inácio Lula da Silva (PT) at the Palacio do Planaldo, the agreement is worth R$170 billion, of which R$38 billion has already been disbursed. The largest portion, R$100 billion, will be paid over 20 years.

The action in the United Kingdom involves more than 620,000 people, 46 local governments and around 2,000 companies, who are seeking compensation from BHP, a partner of Vale Samarco, the company that operated the mine where the dam collapsed in 2015. Path of Destruction.

The estimated value of the compensation sought is 36 billion pounds (R$266 billion) — the largest in British judicial history and the largest in the world, according to the BBC.

“The loss is already covered by the Brazilian deal,” D’Ambrosio said on a conference call with analysts to detail Vale’s financial results for the third quarter of 2024. protected.”

Another argument is that the conclusion of the negotiations with the Brazilian authorities under the supervision of the Court reinforces the claim that Brazil is the proper jurisdiction to discuss the matter.

The agreement signed this Friday has already had an impact on quarterly results, with an increase of US$ 1 billion (R$ 5.6 billion) in provisions for the payment of negotiated amounts. The allocation is now US$4.7 billion (R$26 billion). :

In the fourth quarter, Vale expects to pay R$3.7 billion with the agreement. By 2025, it will be R$11 billion and values ​​will decrease over the years.

In a conference call with analysts, Vale’s president, Gustavo Pimenta, said the deal marks an important chapter in the company’s history. “This agreement reinforces our commitment to people, communities and the environment.”

He took over after a tumultuous succession process, taking on political overtones with the aim of improving the company’s relationship with its stakeholders, including governments and communities close to its operations.

In recent months, the government has questioned the delay in signing the deal as an argument for criticizing the company’s privatization. This Friday, Lula brought up the topic again, saying, “It’s very difficult to negotiate with a ‘corporation’ because we don’t know whose it is.”

Pimenta said relationship enhancement is one of the three pillars of the company’s future strategy, along with improving product portfolio and operations efficiency. In this sense, he says, Vale wants to “build long-term and reliable relationships”.

The office says the deal falls far short of covering damages

In a statement released late in the afternoon, Pogust Goodhead’s office, which is co-ordinating the action in the English court against BHP, Vale’s partner in Samarco, said the signing of the deal “after 9 years of indifference” in Brazil brings values. “Far from compensating for the profound losses of the victims”.

As for the company, the English courts have already ruled that the trial can proceed, “despite BHP’s repeated attempts to deny our customers this avenue of justice.” According to Bogust, the agreement concluded in Brazil does not contain consequential moral and material damages and “only proves the appropriateness of the English action”.

“The case will set a historical precedent, making it increasingly difficult for multinational corporations to ignore their responsibility to the communities in which they operate.”

José Henrique Mariente from Berlin collaborated