Samarco agrees damages for mine disaster

THE owners of a Brazilian mine that triggered a deadly mudslide in November have agreed to pay R$4.4bn (US$1.1bn) in damages over the coming three years.

Samarco, jointly owned by mining giants BHP Billiton and Vale, will provide the money to clean up the region and compensate local people. The 15-year agreement with Brazilian authorities could see payouts rise to R$9.2bn by 2021, the company said in a statement.

The companies have not disclosed how much they estimate will be paid in the final nine years of the deal, but confirmed the compensation period could be extended in yearly increments beyond 15 years until it has satisfied all of the obligations of the agreement.

A statement from Brazil’s Attorney General cautions that the cost of damages could reach R$20bn though “the agreement does not provide for a cap on the amount” and miners should ensure they have the funds available “if it is identified that a higher amount is needed”.

If Samarco is unable to pay, then Vale and BHP Billiton Brasil will be jointly responsible, the companies confirmed.

On 5 November, two tailings dams at the Samarco iron ore mine in Minas Gerais, south east Brazil burst, releasing a huge mudslide that swallowed up villages, and killed at least 17 people – with two still missing – and left hundreds homeless.

The deal settles a civil lawsuit filed by authorities, however criminal charges brought against six company executives and a contractor still remain. Those accused include Samarco’s CEO Ricardo Vescovi who faces charges of homicide – equivalent to involuntary manslaughter under UK law.

The cause of the incident is being investigated by an independent agency.