Merrill Lynch, Citi, JPMorgan Face Lawsuit for Loans to Vale

Merrill Lynch, JP Morgan, Citibank, and other financial institutions allegedly enabled and funded environmental degradation by Brazilian mining company Vale SA, according to two proposed class actions filed in federal court in Manhattan.

According to Brazilian law, lenders are held strictly liable for pollution and contamination caused by projects they finance—and the companies have loaned more than $17.2 billion to Vale, the complaints say. They also hold substantial equity stakes in the mining company.

Vale’s mining operations in Minas Gerais, a Brazilian state, have polluted the land, air, and water in the region—threatening the health and ...