Brazil tips Samarco restart in two months
BHP Billiton’s Samarco timeline remains unchanged, despite Brazil’s government flagging a restart in two months.
The Brazilian government has tipped operations at the Samarco mine to resume in two months, although confidence has been tempered by part-owner BHP Billiton noting its timeline remained unchanged.
The joint venture of BHP and Brazil’s Vale has been offline since the tragic collapse of an iron ore tailings dam in Bento Rodrigues in November 2015 killed 19 people and all but wiped out several small communities.
Questions have been raised around whether Samarco would ever restart, although BHP said last month it hoped to resume mining at some stage in 2017.
Those hopes were raised overnight by comments from Brazil mines and energy minister Fernando Coelho Filho, who said a restart was “probable” in two months in an interview at the World Economic Forum in Davos, Switzerland.
“[The mine will] get back in business having addressed all the environmental and legal problems,” he said, according to Bloomberg.
BHP’s most recent commentary on the likely timeline for a resumption in December was cautious on timing specifics, although it noted Samarco had submitted applications to local authorities to restart mining at the site.
“A restart of operations is technically feasible in 2017, however, restart will occur only if it is safe to do so and the necessary approvals are received from Brazilian authorities,” BHP said at the time.
It has since reached a deal with Vale to use its JV partner’s Timbopeba pit to deposit tailings, which would allow Samarco to operate for several years without the need for a new tailings structure.
A spokesperson for the miner told The Australian today a 2017 restart remained “technically possible”, although it noted no change to its broad timeline as a number of issues are gradually addressed.
Government approvals represent just one factor in any resumption.
BHP’s reaffirmation of its prior commentary hints a restart in March may be unlikely.
Upon a reopening, the mine is slated to initially produce at 60 per cent of capacity, which would represent a yearly run rate of around 18 million tonnes.
In the aftermath of what many consider Brazil’s worst environmental catastrophe, BHP and Vale have been beset with legal problems.
The miner has set aside $US1.2 billion in provisions to cover the cost of the clean-up after striking a $US2.3bn agreement with authorities.
Question marks remain as to whether this figure will need to be raised with legal action pending in Brazil.
BHP is also fighting criminal charges on behalf of eight current and former employees.
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