World

Brazilian petrochemical company agrees to pay £277m to city affected by mining

Homes stand abandoned because of the threat of ground subsidence caused by the Braskem mine in Maceio, Alagoas state, Brazil (Eraldo PeresAP/PA)
Homes stand abandoned because of the threat of ground subsidence caused by the Braskem mine in Maceio, Alagoas state, Brazil (Eraldo PeresAP/PA) Homes stand abandoned because of the threat of ground subsidence caused by the Braskem mine in Maceio, Alagoas state, Brazil (Eraldo PeresAP/PA)

Brazil’s petrochemical giant Braskem has said it has reached a 356 million dollar (£277 million) settlement with a coastal city where four decades of the company’s rock salt mining destroyed five urban neighbourhoods and displaced tens of thousands of people.

Around 200,000 people in the Alagoas state’s capital of Maceio were affected by the excessive extraction of rock salt, according to the Brazil Senate’s website.

In recent years, several Maceio communities became ghost towns as residents accepted Braskem’s payouts to relocate.

Brazil Mining Settlement
Brazil Mining Settlement Paulo Sergio Doe, his wife Alessandra Cavalcante Doe and their children stand outside their home behind a sign which reads ‘Braskem Assassin. We are Resistance’ in the Pinheiro neighborhood of Maceio, Alagoas state, Brazil (Eraldo Peres/AP/PA)

The settlement — about 1.7 billion Brazilian reais — between Braskem and Maceio will be used for structural works in the city and for a residents’ support fund, the municipality said in a statement. The agreement does not invalidate negotiations between Braskem and the residents of the affected areas, it added.

The company has so far paid over 3.7 billion reais (£602 million) in various compensations, including financial aid, Braskem said earlier this month. It said that Friday’s settlement “represents yet another important advance” in the issue of Alagoas.

According to Braskem, more than 17,000 residents — or over 90% of all residents that the company plans to compensate — and more than 5,000 businesses had received compensation by the end of June.

Local activists were less enthusiastic following Friday’s announcement.

Pastor Wellington Santos at the Baptist church in Pinheiro, one of the affected neighbourhoods, said he recognises the funds will be used to “modernise the city and make it even more beautiful,” but wondered whether any amount of money could compensate for the destruction.

Alexandre Sampaio, who heads an association of the mining victims, said the full extend of the mining damage is difficult to comprehend.

Brazil Mining Settlement
Brazil Mining Settlement A school stands abandoned because of the threat of ground subsidence caused by the Braskem mine in the Pinheiro neighborhood of Maceio, Alagoas state, Brazil (Eraldo Peres/AP/PA)

“The real size of the damage caused to the health, education, social assistance, infrastructure, urban mobility, material and immaterial historical heritage is not clear,” Mr Sampaio said.

Braskem is one of the biggest petrochemical companies in the Americas, owned primarily by Brazilian state-run oil company Petrobras and construction giant Novonor, formerly known as Odebrecht.

Petrobras is currently negotiating a potential sale of Braskem.

Rock salt mining is a process of extracting salt from deep underground deposits. However, brine-filled cavities left behind when the salt has been extracted can eventually collapse, causing the soil above to settle. Structures built on top of such areas can topple.