Samarco owners close to dismissing $48.3 billion lawsuit

Samarco, a Brazil-based pellets producer, along with its shareholders Vale and BHP Billiton, are close to dismissing a BRL 155 billion ($48.3 billion) lawsuit with public prosecutors.

Vale announced on Thursday that it signed two separate preliminary agreements with public prosecutors.

According to Vale, the first agreement, known as conduct adjustment commitment (TAC) term, aims to define the proceedings and the timeline of the company’s negotiations with the public prosecutors for a further final conduct adjustment commitment term.

The first TAC term creates the bases for the conciliation between Samarco, its shareholders and different parties, including state and federal governments, over two lawsuits.

The first is worth BRL 155 billion and the second BRL 20 billion. The first was filed by public prosecutors and the second by the Brazilian government, and the states of Minas Gerais and Espirito Santo. Both lawsuits are being analyzed at a Minas Gerais state court.

Under the first TAC term, Samarco and its shareholders should hire experts appointed by public prosecutors to follow-up on 41 programs the three companies agreed to implement in March 2016. Additionally, Samarco should also show up in at least 11 public hearings by April 15, 2017, in the states of Minas Gerais and Espirito Santo.

Vale said the first TAC term also asks the three companies to show a Minas Gerais state court guarantees they will pay BRL 2 billion to repair the environmental damages they caused following the Mariana disaster.

The second preliminary TAC term establishes a chronogram for the companies to make the funds they agreed to pay available for such repair works.