Following the press release dated October 18, 2024, Vale S.A. (“Vale” or “Company”) informs that Samarco Mineração S.A. (“Samarco”), BHP Billiton Brasil Ltda. (“BHP Brasil”) and the Company (jointly, “the Companies”), together with the Brazilian Federal Government, the State Governments of Minas Gerais and Espírito Santo, the Federal and State Public Prosecutors’ and Public Defenders’ Offices and other Brazilian public entities (jointly, “the Parties”) reached today a definitive and substantial settlement (“Definitive Settlement”) of claims related to the Fundão dam collapse in Mariana, Minas Gerais, Brazil, on November 5, 2015. 

“The Definitive Settlement enabled a mutually beneficial resolution for all Parties under fair and effective terms, while creating definitiveness and legal certainty. It is the result of a high-level mediation process conducted by the Brazilian Federal Court of Appeals of the 6th Region, with open dialogue and transparency. The engagement of Brazilian authorities and public entities ensured legitimacy to the settlement, which was supported by social, environmental and technical criteria. This important agreement also reinforces our commitment to Brazilian society and to a better future for the people, communities and the environment", said Gustavo Pimenta, Vale’s CEO. 

The final and definitive settlement documentation was approved by all Parties, including Vale’s Board of Directors, and signed today. The Definitive Agreement addresses all demands involving the signatory Brazilian public authorities, related to the collapse of Samarco's Fundão dam, including all socio-environmental damages and all collective and diffuse socioeconomic damages resulting from the rupture. 

Key financial commitments  

The Definitive Settlement provides for a total financial value of approximately R$ 170 billion, comprising past and future obligations, to serve the people, communities and the environment impacted by the dam failure. It sets three main lines of obligations. 

R$ 100 billion - Main line of obligation: Installment payments over 20 years to the Federal Government, the States of Minas Gerais and Espírito Santo and the municipalities to fund compensatory programs and actions tied to public policies. 

R$ 32 billion - Main line of obligation: Performance obligations by Samarco, including initiatives for individual indemnification, resettlement, and environmental recovery.  

R$ 38 billion - Main line of obligation: Amounts already invested on remediation and compensation measures. 

Obligations to pay  

Funds will support several compensation fronts, ensuring substantial resources for improvements in health, sanitation, fishing activities and community funding, and a dedicated approach to indigenous and traditional communities, and municipalities.  

Obligations to perform  

Samarco will execute certain obligations, including a voluntary-based, simplified individual indemnification system, measures towards the Doce River environmental recovery and the completion of community resettlements, which already reached around 94% of total cases to be delivered as of September 30, 2024. Hence, part of the Renova Foundation’s 42 programs will be gradually transferred to Samarco or the authorities, while the remaining programs will be closed. The Renova Foundation’s governance body will cease on signing. 

Vale’s provision and cash outflow expectation  

Vale reaffirms its commitments to supporting Samarco in repairing the damage caused by the Fundão dam collapse and to the shareholders' previously agreed obligation to finance, up to a 50% share, the amounts that Samarco may eventually fail to fund as the primary obligor. Vale’s provision recorded for those obligations is US$ 4.7 billion as of September 30, 2024, and includes estimates of Samarco’s contributions. The estimated timeline for cash disbursement is presented below. 

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Parties’ legitimacy  

Parties’ legitimacy A high-level mediation process by the Brazilian Federal Court of Appeals of the 6th Region and the engagement of Brazilian public institutions, playing their Constitutional role as authentic representatives of the affected people, have ensured transparency and legitimacy to the settlement process. 

Click here to find out more about the definitive settlement.