Brazilian Dam Collapse in 2019: Vale fined $7 billion in compensation

Vale, the company owning a mining waste dam that collapsed in 2019 was fined $7 billion in compensation.

On January 25, 2019, an 86-meter dam operated by Vale, a multinational firm in the mining and metal industry based in Brazil, collapsed resulting in 270 fatalities and extensive damage to the local environment in the state of Minas Gerais. The dam was holding waste from an iron ore mine situated nearby. The failure triggered mudslides, floods and contaminated the local rivers with mining wastes. At the time of the failure, more than 300 workers were in the vicinity of the dam with many of them being buried under debris. 

The environmental impact caused by the dam's burst was immense. More than 1,2 square km of forests were impacted while about 320 km of Paraopeba River, which provided water supply to Minas Gerais, were polluted. In fact, toxic elements were subsequently found in the São Francisco River that supplied 5 more states of Brazil with drinking water.

The Brumadinho city located near the dam was severely damaged with houses, stores, and additional facilities being hit by mudflows. Since the incident, more than 100,000 people affected by the collapse are receiving monthly payments by Vale.

The dam's failure was unexpected since no earthquakes or intense rainfalls had struck the region. Nevertheless, it was recently reported that Vale has been internally warned about the structure's stability conditions many times before the catastrophic incident. In fact, an independent commission investigating the incident stated that safety risks existed since 2003 and Vale was aware of them. Moreover, the firm was warned again in 2015 after a similar dam burst (owned by Vale)  resulted in 19 casualties. For that case, Vale paid a compensation of $6.2 billion.

According to a report issued later in 2019, the collapse was associated with incapacities of the dam's drainage system. The inability to remove excess water resulted in pore water pressure increase and eventually to soil liquefaction and failure. A strange fact is that a report issued by Tüv Süd in 2018 ensured the safety of the dam despite defects in the drainage system and cracks were detected.

On February 4, 2021, the settlement between the state of Minas Gerais and Vale was announced. The mining firm will pay $7 billion which will be directed to the "affected communities, emergency aid, and resources for urban mobility".  About 30% of the compensation will be granted to the city of Brumadinho, dedicated to new projects that will create job opportunities and to the families of the victims. Farmers whose livestock and fields were destroyed after the dam's failure will also receive compensation. The rest of the fine will be used by Minas Gerais to fund major projects across the state despite some people believe that all the amount should be attributed to the affected people and communities.

Despite the agreement on a large fine, groups that assisted the families of the affected people since 2019 stated that the victims were excluded from the negotiations and that the settlement was "made behind closed doors". Some relatives of the victims mentioned that they are not consoled by the agreement.

Stunning footage from the dam's collapse can be found in the video below