BHP-Vale deal distances Brazil mine from $53bn in lawsuits
It came down to the wire, but BHP Billiton Ltd., Vale SA and their Samarco joint venture managed to close a deal with prosecutors that distances the companies from 175 billion reais ($53 billion) in lawsuits.
Their lawyers filed documents late Thursday requesting that the presiding judge suspend two civil suits. The judge had given the two sides until last night to come to an agreement on how to move forward with the remaining cleanup efforts and reparations after a deadly tailings dam spill in 2015.
Samarco first tried to address compensation in March 2016 when then President Dilma Rousseff held a signing ceremony for an accord that the federal government hashed out with the companies. But prosecutors in Minas Gerais state saw the federal deal as insufficient, filing suit even as the companies moved ahead with the cleanup and set up a foundation to handle payments.
As part of Thursday’s arrangement, the two sides are seeking another 150 days to fine-tune primarily how the prosecutors will participate in overseeing reparations. This new accord also outlines hiring consultants to complete a broader assessment of damages, such as the lingering effects the disaster wrought on industries such as fishing and tourism.
The proposal presented to the judge represents a major step towards ending cost uncertainties. Once final studies and public hearings, defining the dynamics of governance, are complete, the idea is to make the suspension of the two lawsuits permanent.
The prosecutors office couldn’t be reached for comment. BHP, Samarco and Vale all declined to comment.
Authorities have called the Samarco accident Brazil’s worst environmental disaster. When a tailings dam ruptured, unleashing billions of gallons of sludge that killed 19 people and polluted waterways in two states.
Beyond the cleanup, Samarco’s owners have refused to cover their joint ventures debt obligations, leaving creditors in limbo.
Early this week, the venture received some encouraging news when the regulator responsible for granting licenses announced it would hold a hearing on Nov. 24 to discuss the first permit required for the mine to reopen.
Restarting operations would allow Samarco to resume payments on billions of dollars in debt and rehire thousands of workers in communities that depend on the mine. Before the accident, Samarco generated more than 2 billion reais in annual profit for BHP and Vale.
(Story by R.T. Watson).
See also: Brazilian iron ore miner Samarco has told unions it needs to cut 600 workers by December