President Luiz Inacio Lula da Silva attended the signing of the deal over the collapse of a tailings dam at a mine in the southeastern town of Mariana, which triggered a giant mudslide that swamped villages, rivers and rainforest, killing 19 people.
"I hope the mining companies have learned their lesson: it would have cost them less to prevent (the disaster), much less," Lula said after a ceremony attended by representatives of Brazil's Vale and Australia's BHP, co-owners of the Brazilian company Samarco that operated the Fundao dam.
The agreement comes on the fifth day of a mega-trial in London over whether BHP was liable for the spillage of over 40 million cubic meters of highly toxic mining sludge, the equivalent of 12,000 Olympic swimming pools, on November 5, 2015.
More than 620,000 complainants, including 46 Brazilian municipalities, are seeking an estimated GBP 36 billion ($47 million) in damages in the civil trial.
BHP denies responsibility.
BHP and Vale had already agreed in 2016 to pay 20 billion reais (about $3.5 billion at today's rate) in compensation, but the negotiations were re-opened in 2021 due to what the government called their "non-compliance" and the slow progress of Brazil's justice system in resolving the dispute.
Friday's agreement in Brazil covers their past and future obligations to assist people, communities and ecosystems affected by the disaster.
The companies agreed to pay 100 billion reais (17.5 billion dollars) to local authorities over twenty years and 32 billion reais ($5.6 billion) towards compensating and resettling the victims and repairing the harm caused to the environment.
The remaining 38 billion reais ($6.6 billion) is the amount that the companies say they have already paid in compensation.
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