BHP has an eye to reopen the Brazil mine as it releases more cash to cleanup

Brazilian 76-year-old farmer Jose Pascual walks through a devastated area hit by the collapse of the tailings dam. Yasuyoshi Chiba/AFP/Getty Images

BHP Billiton today approved a further US$181 million (AU$244 million) for remedial work following the fatal disaster at its joint venture mine in Brazil a year ago.

The amount is part of $US1.2 billion already foreshadowed by the big miner.

The Samarco iron ore mine’s tailings dam collapsed in November last year, sending a wave of mud downstream, killing 19 people, including five from a village of 12 working at the mine.

BHP is also creating a short-term facility of up to $US115 million to carry out remediation and stabilisation work and to support Samarco’s operations.

“Funds will be released to Samarco only as required and subject to the achievement of key milestones,” says BHP.

“The short-term facility allows BHP Billiton Brasil to preserve the value of its investment as options for restart continue to be assessed.”

BHP is working towards reopening the mine it jointly owns with Brazil miner Vale.

“A restart of Samarco operations is important for Samarco, BHP Billiton Brasil, Vale, the local communities and for the Brazilian economy,” the company said.

“Restart will occur only if it is safe and economic to do so and the necessary approvals have been obtained from Brazilian authorities. BHP Billiton Brasil continues to work through options for restart with Vale and Samarco.”

BHP is fighting an $8 billion civil suit in Brazil.

A deal between Brazilian authorities and BHP and Vale to clean up the environmental mess from the disaster fell apart.

The Federal Court of Appeal in Brasilia ratified the deal in May. However, the Federal Prosecutors’ Office then won an appeal against the ratification.

This increases the potentially liability for BHP. A cap placed on the cost of the cleanup has been lifted and a BRL20 billion ($A8 billion) public civil claim for damages made by the Brazilian Authorities against Samarco, Vale and BHP Brazil reinstated.

BHP says it intends to appeal the decision by the Superior Court of Justice.

Analysts calculate impact from the mud slide will strip about 4% from BHP’s profits.

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