Iron ore weakness to continue into 2025 and beyond, says Fitch Solutions’ BMI
Looking beyond 2024-2025, BMI analysts maintained their view that iron ore prices will likely follow a multi-year downtrend.
Samarco and its owners, Vale SA and BHP Group, agreed to almost double their offer in compensation for a 2015 mine waste disaster in Brazil, according to people with knowledge of the matter who asked not to be named because the discussions are private.
The mining companies raised the proposal to more than 100 billion reais ($19 billion) after Brazilian authorities showed disappointment to the 52 billion reais ($10 billion) offered. The new value is closer to a 155 billion reais public civil action for reparation used by prosecutors as a benchmark.
Officials said last week the two sides were still far from a final settlement, and would undertake the necessary measures to obtain reparation if the companies did not bring to the negotiation table a “minimally worthy” offer to repair the collapse that killed as many as 19 people and contaminated waterways in two states.
The increase in the amount should mean additional provisions for the companies that already disbursed 23 billion reais through Renova Foundation, which was created to compensate for and repair damages.
Talks for a final multibillion-dollar settlement advanced since last week, the people said, but are depending on an agreement on the time frame for disbursement. The negotiation involves the federal government, Mina Gerais and Espirito Santo states, judicial authorities, Samarco and its two parent companies.
Brazil’s Environment Minister Joaquim Leite said in a radio interview this week the deal will involve the creation of a fund to be managed by Brazil’s development bank BNDES with the purpose to create a green economy in the region affected by the disaster, Agencia Brasil reported.
Vale said it remains committed to repairing the damage caused by the dam collapse, and to the negotiation process.
Samarco also said it remains open to dialogue to reach an agreement that promotes efficiency in repairing the damage caused by the rupture of the dam.
BHP said negotiations are ongoing.
(By Mariana Durao)
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