The mining industry is going through a pretty horrendous time right now. Commodity prices have been slumping for years, and economies driven by resource extraction are struggling. But two mining firms have it even worse.
BHP Billiton and Vale have been fined a 1 billion Brazilian reals ($US171 million; $US260 million) for their roles in the collapse of a damn at an iron ore mine in the Brazilian state of Minais Gerais.
On November 5, a dam at a mine run by Samarco collapsed, causing a mudslide that has so far claimed 11 lives. 12 people are still missing, according to reports from the BBC. More than 600 homes were also destroyed in the collapse.
Vale and BHP jointly own Samarco and have already been fined a much smaller amount — 250 million reals (£43 million; $US65.4 million), but the new fine will add to their woes.
Carlos Eduardo Ferreira Pinto, a prosecutor in Minais Gerais said “We know that the amount of damages could be much greater, but the agreement establishes a firm legal guarantee,” according to the BBC.
Speaking last week, BHP’s chief executive Andrew Mackenzie was unequivocally apologetic for his firm’s role in the tragedy, saying in a press conference “At BHP Billiton, we have been overcome with sadness and our concern for your community.
“We are deeply sorry, so sorry, to everyone who has, and will suffer, from this terrible tragedy, to the friends and the families of those killed and missing and to those who have lost their homes and their possessions and who feel that their livelihoods may be under threat.”
Both Vale and BHP have already announced pretty poor results this year, and the new multi-million pound fines is more bad news for their balance sheets. Plummeting iron ore prices mean that Vale reported 28% drop in revenues in Q3, while BHP’s full year profits fell by 52% to their lowest level in more than a decade in 2015.
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