Braskem’s Alagoas Crisis: A Multi-Billion Liability Nearing Resolution

Mar 23, 2026

Origins of the Alagoas Crisis: Before the Damage

Before the crisis, Braskem operated a long-established rock salt extraction business in Maceió, the capital of Alagoas.

The company used solution mining, injecting water into underground salt layers, dissolving them, and extracting brine for chlor-alkali production. This operation dates back to the 1970s and supplied key inputs like chlorine and caustic soda.

A critical risk, however, was structural:

🟥 extraction was conducted directly beneath dense urban districts such as Pinheiro, Mutange, and Bebedouro.

For decades, no large-scale surface damage was formally identified.

What the Area Looked Like Before the Crisis

The image below shows a densely populated urban grid in Maceió, with fully developed residential neighborhoods, schools, and infrastructure located directly above Braskem’s mining areas.

Source: Google Earth

🟥 This is essential context: the crisis did not begin in a remote or industrial zone, but in a fully functioning city environment.

And now.

Source: Google Maps

The Trigger: 2018 Seismic Event

In March 2018, a low-magnitude earthquake (~2.5–2.7) marked the turning point.

Residents soon reported:

cracks in buildings
uneven floors
ground subsidence
road deformation

Investigations by CPRM linked the damage to instability in underground salt caverns created by Braskem.

Escalation and Attribution (2019–2020)

By 2019, the issue became a full-scale urban crisis.

CPRM confirmed that:

subsidence
structural damage
collapse risk

were directly tied to mining activity.

More than 14,500 properties were affected, forcing authorities to begin large-scale evacuations and pushing Braskem into negotiations.

Source: Braskem

Compensation Framework: How Braskem Structured Payments

Rather than prolonged litigation, Braskem moved relatively quickly toward a comprehensive settlement model, which became one of the largest urban compensation programs in Brazil.

2019 Initial Agreement (Public Prosecutors + Authorities)

Braskem signed agreements with:

Ministério Público Federal
Ministério Público do Estado de Alagoas

This established the foundation for:

financial compensation
relocation programs
social mitigation measures

Source: Braskem

Scale of Execution (Q3 2025 Update)

By the end of September 30, 2025, Braskem had effectively moved the Alagoas crisis into its final execution phase, with most operational and financial fronts largely completed.

Compensation & Relocation

The Financial Compensation and Relocation Support Program (PCF) is essentially complete:

99.9% (19,197) of proposals submitted
~99.5% already paid

🟥 This indicates that nearly all affected residents have been compensated and relocated, removing the largest source of uncertainty.

Cavern Closure Progress

The company continues to execute the technical closure of 35 salt caverns:

6 caverns fully filled with solid material
2 reached technical filling limits
5 currently in filling process
5 in preparation phase
6 caverns naturally filled (confirmed by ANM)
11 caverns remain pressurized for long-term closure strategy

🟥 Importantly, the process is now engineering-driven rather than crisis-driven, with a clear path toward a maintenance-free final state.

Financial Liabilities & Accounting Shift

At the end of Q3 2025:

Provision balance declined to R$ 3.8 billion (-19% QoQ)

However, this reduction is primarily accounting-driven, due to:

reclassification of obligations into “Other Payables”
reflecting execution (payments) rather than risk reduction

🟥 In other words, liabilities are being paid and scheduled, not expanding.

Source: Braskem

State Agreement: A Key Turning Point

On November 10, 2025, Braskem signed a landmark agreement with the State of Alagoas:

Total value: R$ 1.2 billion
R$ 139 million already paid
Remaining balance: 10 variable annual installments, mostly post-2030

Crucially:

🟥 The agreement provides full discharge from state-level damages, including:

property
non-property claims

and includes the termination of the state’s indemnification lawsuit (subject to judicial approval).

Current situation

This is Marcelo Braskem. This was 4 months ago, but now everything has been covered with sand and the road has been completed.