Nov 10, 2020

English judge blocks £5bn Brazil lawsuit against BHP

Brazil
BHP
lawsuit
Dominic Ellis
3 min
BHP welcomed the decision and reinforced its view that victims should pursue claims in Brazil
BHP welcomed the decision and reinforced its view that victims should pursue claims in Brazil...

A £5 billion English lawsuit against Anglo-Australian mining giant BHP has been struck out, in a blow to a 200,000-strong Brazilian claimant group seeking damages after a devastating dam failure in 2015.

According to a Reuters report, a High Court judge in Manchester has ruled that managing the largest group claim in English legal history would be like “trying to build a house of cards in a wind tunnel” and that the case is an “abuse of the process of the court”.

BHP welcomed the decision, the report adds, stating that it reinforced its view that victims should pursue claims in Brazil and that the case duplicated ongoing work and legal proceedings there.

Tom Goodhead, a lawyer at PGMBM representing the claimants, says the judgement is “fundamentally flawed” and vowed to appeal.

“We will continue to fight ceaselessly, for however long it takes, in any court in the world, to ensure that BHP are held accountable for their actions,” he states.

In 2015, the collapse of the Fundao dam, which is owned by the Samarco joint venture between BHP and Brazilian iron ore mining giant Vale. The collapse killed 19 and sent a torrent of mining waste into communities, the Doce river, and the Atlantic Ocean, 650 kilometres away. It was Brazil’s worst environmental disaster.

The case is the latest battle to establish whether multinationals can be held liable for the conduct of subsidiaries operating abroad, the Reuters report says.

The ruling comes 18 months after the UK Supreme Court ruled that nearly 2,000 Zambian villagers could sue miner Vedanta in England for alleged pollution in Africa, because substantial justice was not obtainable in Zambia.

Martyn Day, partner at Leigh Day, the firm who represented the Zambian villagers, says that he takes his hat off to the Brazilian claimant’s legal team for having the guts to take on the vast case.

“The judge seems to me to have been tough on the claimants,” he says. “The question for the appeal court will be whether or not he was too tough,” according to the Reuters report.

Claimants allege that senior BHP executives sat on Samarco’s board, and that BHP representatives approved of plans to repeatedly ramp up the dam’s capacity, ignoring safety warnings. They assert that the victims have no prospect of proper compensation in Brazil within a reasonable timeframe.

Lawyers for the claimants, who include municipalities, indigenous people, businesses and churches, also argue that under Brazilian law, liability for environmental damage could be imposed on a defendant’s ultimate owner.

Both BHP and Vale say that they have donated £1.29 billion into the Renova Foundation, which was set up in 2016 by BHP’s Brazilian division, Samarco and Vale to manage 42 reparation projects, including providing financial aid to indigenous families, rebuilding villages and establishing new water supply systems.

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May 8, 2021

Global iron ore production to recover by 5.1% in 2021

Iron ore
BHP
Anglo American
GlobalData
2 min
After COVID-19 hit iron ore output by 3% 2020, GlobalData analysis points to 5.1% uptick in 2021

Global iron ore production fell by 3% to 2.2bnt in 2020. Global production is expected  to grow at a compound annual growth rate (CAGR) of 3.7% to 2,663.4Mt between 2021 to 2025. The key contributors to this grow will be Brazil (6.2%), South Africa (4.1%), Australia (3.2%) and India (2.9%). Key upcoming projects expected to commence operations include South Flank in Australia (2021), Zulti in South Africa (H2 2021), Serrote Da Laje in Brazil (H2 2021) and Gudai-Darri (2022), according to GlobalData, a leading data and analytics company.

Iron Ore

Vinneth Bajaj, Associate Project Manager at GlobalData, comments: “Declines from Brazil and India were major contributors to the reduced output in 2020. Combined production from these two countries fell from a collective 638.2Mt in 2019 to an estimated 591.1Mt in 2020. The reduced output from the iron ore giant, Vale, was the key factor behind Brazil’s reduced output, while delays in the auctioning of mines in Odisha affected India’s output in 2020.

“Miners in Australia were relatively unaffected by COVID-19 due to effective measures adopted by the Australian Government, while a speedy recovery in China led to a significant 10.4% increase in the country’s iron ore output.”

BHP

Looking ahead, the global iron ore production is expected to increase by 111.3Mt to 2,302.5Mt in 2021. Rio Tinto is expected to produce up to 340Mt of iron ore, while BHP has released production guidance of 245–255Mt, supported by the start of the Samarco project in December, which is expected to produce between 1–2Mt.The company has retained its guidance for Australian mines at 276–286Mt on a 100% basis, due to scheduled maintenance work at its ore handling plant and tie-in activity at the Area C mine and South-Flank mine.

Anglo American

Bajaj added: “The remaining companies are expected to produce more than 600Mt of iron ore, including FMG, whose production is expected to range between 175–180Mt supported by its Eliwana mine that commenced operations in late December 2020, and Anglo American, which is expecting to produce between 64–67Mt. Vale is expected to resume 40Mt of its production capacity, taking its overall production capacity to 350Mt in 2021, with production guidance of 315-335Mt.”

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