Wet season warning for Samarco
BHP Billiton has warned that more tailings from the Samarco iron ore mine in Brazil could enter the local river system.
BHP Billiton has warned that more tailings from the Samarco iron ore mine in Brazil could enter the local river system, with reinforcement work on the burst tailings dam that killed 19 people not scheduled to finish before the coming wet season.
This could lead to more legal claims and fines, on top of more than $60 billion worth of claims that BHP and Vale, its 50 per cent joint venture partner, are contesting, and a delayed start-up at the mine.
Samarco’s tailings dam burst on November 5, killing 14 workers and five local community members as 30 million tonnes of fast-moving mining waste hurtled into the valley below.
The sludge all but levelled the nearby town of Bento Rodriguez and killed fish and contaminated drinking water along the Rio Doce river system.
In its 2015-16 annual report, released yesterday, BHP warned that more tailings could spill from the dam and enter the river system. It said “a large portion” of construction to reinforce and improve the dams at Samarco so they could contain the remaining tailings, or mining waste, were scheduled to be completed before the start of the wet season in November.
“The potential nonetheless remains for further release or downstream movement of tailings material during this season,” BHP said in the “risk factors” section of the report.
“This may result in additional claims, fines and proceedings, or impact existing proceedings, and may also have additional consequences on the environment and the feasibility, timing and scope of any restart.”
BHP had hoped to start the mine again this year but in June said this target would not be met.
So far, BHP has written off $US2.2bn of value because of the disaster, taking into account a $9bn Brazilian real ($3.64bn) framework agreement, to be paid by BHP, Vale and Samarco, that suspended an earlier $R20bn public civil claim.
Since the framework agreement for the settlement was ratified by Brazil’s Federal Court, federal prosecutors have brought a $R155bn claim for reparation, compensation and moral damages and the Superior Court of Justice has issued an interim order suspending the framework agreement and reinstating the original $R20bn claim.
There are also more than 23,000 small claims.
The $R155bn claim, which BHP and Vale are contesting, is seen by most observers as an ambit claim, and has been calculated based on the cost of BP’s charge following the disastrous Deepwater Horizon oil spill in the Gulf of Mexico in 2010. “Our potential costs and liabilities in relation to the Samarco dam failure are subject to a high degree of uncertainty and cannot be reliably estimated at this time,” BHP said.