(Bloomberg) -- Vale SA reached a settlement agreement with Brazilian authorities for a dam collapse that killed 270 people and led to production cutbacks that stripped the company of the title of world's biggest iron ore producer.
The agreement comes after the two-year anniversary of the Brumadinho disaster on Jan. 25, giving affected communities a clear framework for compensation and reparations and removing a considerable legal overhang for Vale shareholders.
Vale agreed to pay 37.7 billion reais ($7.03 billion) in initiatives including payment of a cash benefit for the people affected by the break, and investments in environmental projects, according to a statement from Vale.
The two sides came together after Vale initially presented a value of about 21 billion reais, while the state of Minas Gerais outlined 28 billion reais in material damages plus 26 billion reais in moral damages.
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