Vale Doesn't Expect Samarco Venture With BHP to Restart This Year
28 Luglio 2017 - 01:41AM
Dow Jones News
By Paul Kiernan
RIO DE JANEIRO -- Brazilian mining giant Vale SA said Thursday
its Samarco joint venture with BHP Billiton Ltd. is no longer
expected to resume operations this year after a catastrophic dam
disaster in 2015.
Samarco has stumbled through the complex process of obtaining
licenses to restart its iron-ore operation in southeast Brazil
following the rupture of its Fundão tailings dam in November 2015,
Vale said in a press release. As a result, "Samarco cannot
estimate, at this time, a date for the return of its
operations."
The delays could increase the financial burden that Vale and BHP
Billiton have to shoulder in order to remediate the disaster, which
killed 19 people and polluted hundreds of miles of rivers with
iron-ore waste. With its operations suspended and no incoming cash,
Samarco has been in default on its obligations to creditors since
last year.
Vale and BHP each provisioned $1.1 billion on their balance
sheets last year to cover their estimated obligations related to
the incident.
Progress toward a settlement between public prosecutors,
government bodies and the three companies has been slow, meanwhile,
as the parties have struggled to assess on the cost of the
disaster. An agreement the companies accepted alongside various
government agencies in early 2016 would have allowed them to shell
out as little as 9.5 billion reais ($3 billion) through 2030.
In a subsequent civil suit, prosecutors estimated the damage at
155 billion reais ($49 billion), saying the incident caused more
harm than BP's Deepwater Horizon oil spill in 2010. A judge
suspended the latter suit this year, however, giving the parties
until Oct. 30 to negotiate a final settlement.
Write to Paul Kiernan at paul.kiernan@wsj.com
(END) Dow Jones Newswires
July 27, 2017 19:26 ET (23:26 GMT)
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