What: Shares of Vale SA (VALE -1.23%) are up close to 10% today as of 3:30 pm EST as the company announced it was close to reaching a settlement with the Brazilian government over the Samarco dam disaster in November 2015.

So What: Last November, a damn burst that was owned by Samarco Mineracao SA, a joint venture between Vale and BHP Billiton (BHP -1.56%). The resulting rupture caused a flood of mine tailings into a river that resulted in 17 deaths, and flooded several hundred kilometers with mud and mine tailings. 

As you can imagine, an environmental disaster of that magnitude had both companies' investors on edge as to how the two could be punished. Today, though, news broke that Samarco is very close to a deal with the Brazilian government where it will pay $4.9 billion to settle its lawsuit. Even more promising news for the two companies is that if the deal is closed this quickly, the mine cold be back up and running by the end of the year. Shares of BHP Billiton are up 4% today, as well.

Now What: In the midst of an atrocious commodity market, an environmental disaster was something that Vale could ill afford. In reality, the $4.9 billion settlement sounds like the company got off rather easy. 

That doesn't change the fact that Vale still has to navigate this tough commodity market, and hopefully maintain enough financial flexibility to reinvest in the business once the market does turn. Investors today can be relieved that this won't be a drawn-out issue that could hang over the company's stock for a while, but they still need to be diligent about watching how the company keeps costs down and its financial house in order until the upswing in the iron ore market comes.