BHP just got sign off on its $3.1 billion Brazilian mine disaster clean-up deal

Protestors at the entrance to Vale headquarters in Rio de Janeiro. Mario Tama/Getty Images

A Brazilian court has ratified a plan by BHP Billiton and its partner Vale on the clean-up of the fatal Samarco iron ore mine disaster.

Brazil’s Federal Court of Appeal gave the okay to the agreement between the miners and the Federal Attorney General of Brazil, the States of Espirito Santo and Minas Gerais and other public authorities for the restoration of the environment and communities affected by tailings dam failure.

BHP and Vale still face a BRL 155 billion ($A58 billion) civil suit seeking social, environmental and economic compensation.

The mine’s tailings dam collapsed on November 5, sending a wave of mud downstream, killing 17 people, including five from a village of 12 working at the mine. Two people who were working on the dams are still unaccounted for.

The ratified agreement for the cleanup sets the costs at around $US2.3 billion over the next six years.

The Samarco mine, Vale and BHP Billiton Brasil will establish a foundation to develop environmental and socio-economic programs to remediate and provide compensation for damage caused by the dam failure.

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

In its latest half year results, BHP recorded a pre-tax impairment of $US1.188 billion or $US858 million after tax for its investment in the Samarco iron ore mine.

This is made up of $US655 million for the share of losses relating to the Samarco dam failure, $US525 million for carrying value of the investment in Samarco and $US8 million for costs directly paid by BHP Billiton so far.

A short time ago, BHP shares were trading at $18.48, up 0.27%.

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