Brazil to seal $30 billion compensation deal with miners over 2015 dam collapse, sources say

Miners Vale and BHP are discussing a near $30 billion compensation agreement with Brazilian authorities related to the 2015 Mariana dam collapse, they said on Friday, with a deal set to be signed on Oct. 25, according to sources.

The collapse of the dam at a iron ore mine owned by Samarco, a joint venture between Vale and BHP, near the city of Mariana nine years ago unleashed a wave of toxic tailings in a disaster that killed 19 people, left hundreds homeless, flooded forests and polluted the length of the Doce River.

The three mining firms have been negotiating a compensation agreement with the country's public attorney, as well as state and federal authorities for years, hoping it would also end several court actions on the matter.

In separate securities filings, Vale and BHP said the version of the agreement currently being discussed would include a total compensation of 170 billion reais ($29.9 billion), with 100 billion reais to be paid through 20 years directly to public authorities.

The total amount also includes 32 billion reais to be spent by the firms in remediation and compensation measures, and a further 38 billion reais that they have already disbursed, according to Vale and BHP.

The agreement is set to be officially signed on Oct. 25, four sources told Reuters on Friday. Local newspaper O Globo had earlier in the day reported the date.

Vale and BHP did not say when they expect to sign the agreements. Samarco and Brazil's solicitor general office, which is part of the negotiations, did not immediately respond to request for comments on the date.

Vale and BHP said Samarco would be the primary obligor for the payments, with the both owners paying 50% each of any obligations Samarco cannot fund.

Based on that, Vale on Friday forecast that its third quarter earnings will reflect 5.3 billion reais in new liabilities related to the dam's collapse.