BHP unlikely to reopen Samarco this year amid Brazil’s criminal probe

Mining giant BHP Billiton (ASX, NYSE:BHP) (LON:BLT) said Thursday that production at its Samarco iron ore mine in Brazil — a joint venture with Vale (NYSE:VALE) —  is unlikely to resume before the end of the year.

The news comes as Brazil’s federal prosecutors opened Wednesday an investigation into alleged environmental crimes by Roberto Carvalho, chief executive of Samarco Mineração SA, related to the deadly tailings dam burst in November last year.

BHP said about 40% of its Brazilian workforce would take voluntary redundancy to reflect reduced production.

Such probe is independent of a $6.2 billion lawsuit the company and its partner Vale are currently facing for what has been billed the worst environmental disaster in Brazil's history.

The firms had agreed on a $2.2bn settlement in March, but Brazil's Superior Court responded to an appeal from the Federal Prosecutor's Office by issuing an interim order suspending its ratification.

That decision reinstated the $6.2bn public civil claim for clean-up costs and damages.

Brazil’s federal probe it is also independent of the "qualified homicide" charges police in the state of Minas Gerais recommended prosecutors to lay on six of Samarco’s top executives and one contractor in February.

In a statement published by AAP, BHP said it would only resume operations at the mine when it is safe to do so, and “when all regulatory approvals are granted and accepted by the relevant authorities and communities."

The firm also said that about 40% of its Brazilian workforce would take voluntary redundancy to reflect reduced production.

At 30 million tonnes per year before the disaster that killed 19 people, wiped out several towns and polluted rivers, Samarco's pelletizing operations supplied roughly one-fifth of the seaborne trade in the steelmaking raw material that attracts a premium price over iron ore fines and lump ore.