Restart of BHP, Vale mine Samarco delayed until next year

Jobs are being slashed as a restart date for the BHP Billiton and Vale-owned mine is delayed until next year.

The devastation after the dam burst in Brazil last year.

A restart date for the BHP Billiton and Vale-owned Samarco iron ore operation in Brazil has been delayed until next year, putting increased pressure on Samarco’s ability to continue to solely fund the massive clean-up from last November’s devastating tailings dam failure.

Samarco is also starting to lay off more than 1000 workers from the 3000-strong workforce on the previously flagged basis that when operations eventually do resume, it will initially be at 60 per cent capacity.

Reuters reported that Samarco’s head of human resources Benedito Waldson said on Wednesday that the operating company no longer expected to resume mining operations this year, citing a lack of clarity about when the necessary clearances and approvals would be received.

Earlier in the week a $US5.7 billion claim against Samarco and its co-owners was extinguished because of the overarching $US2.3bn settlement reached in March with the national government and the two states most affected by the massive tailings spill.

The settlement included the creation of a foundation that will put in place a range of programs to address the social, economic and environmental consequences of the dam failure, in which 19 people died.

It is to be funded by Samarco in the first instance but BHP and Vale will step in should the need arise. Samarco’s ability to fund the programs over at least the next 15 years is dependent on it resuming operations.

But when it gets the all-clear is up in the air, with a recent $US43bn suit started by Brazil’s federal prosecutors complicating matters.

The companies believe this claim will eventually be dismissed or settled for a much smaller amount.