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BHP Billiton and Vale settle civil claim for Samarco tragedy

20 Jan 2017

BHP Billiton and Vale have agreed to pay R$155bn (about $47.5bn) to settle a civil claim for the Samarco tailings dam disaster in November 2015.

Samarco dam configuration via Google Earth

This means BHP and Vale have abandoned their offer to pay R$6bn over 15 years in their "framework agreement" announced in March, which they claimed Brazilian authorities accepted, but was disputed by the Brazilian federal prosecutors' office.

Under the new agreement, Brazilian federal prosecutors would drop criminal proceedings against Samarco and its owners, BHP said in a statement on Thursday morning, 19 January.

The $47.5bn settlement appears to have been anticipated by investors, with BHP's share price rising 0.64% to A$26.69 in Sydney following the announcement.

Vale closed 4.52% higher at $9.94 in New York on Wednesday.

BHP said a final settlement was likely be announced in June based on the conclusions of experts the federal prosecutors would appoint.

"Any restart of operations at Samarco is subject to a separate set of negotiations with relevant parties and will occur only if it is safe, economically viable and has the support of the community," BHP's statement said.

"Resuming operations would require government approvals, the granting of licences by state authorities, the restructure of Samarco's debt, and the completion of commercial arrangements with Vale regarding the use of its infrastructure."

Known as the Bento Rodrigues dam disaster, an iron ore tailings dam owned by Samarco suffered a catastrophic failure on November 5 2015, causing flooding and at least 17 deaths and 16 injuries.

Source: BDpro

Source: I-Net Bridge

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