Samarco's CEO Goes on Leave

RIO DE JANEIRO—Brazilian mining company Samarco Mineraç ã o SA said Wednesday its chief executive and chief operating officer have taken temporary leaves from their positions, more than two months after the catastrophic failure of a waste-storage dam.

Samarco, a joint venture between Brazilian mining giant Vale SA and Australia's BHP Billiton Ltd., said its board accepted the requests from CEO Ricardo Vescovi and operations chief Kleber Terra. Both were among those accused of environmental crimes by Brazil's Federal Police this month, along with Samarco, Vale, an engineering firm that had declared the dam to be stable, and five other people. Formal charges haven't been filed pending a full investigation.

"After accomplishing the initial crisis response, both executives believe that the temporary leave is important for them to focus on preparing their defense," Samarco said. Neither Mr. Vescovi nor Mr. Terra could immediately be reached for comment.

The Nov. 5 collapse of the Fundã o tailings dam, which held back some 55 million cubic meters of detritus from Samarco's and Vale's nearby iron-ore mines, ranks among Brazil's worst environmental calamities. Up to 19 people were killed and scores of homes destroyed when sludge from the dam wiped out a number of settlements below the structure. More than 400 miles of Brazil's Rio Doce basin were polluted with mud and toxic heavy metals.

In addition to the criminal investigation being carried out by the Federal Police, prosecutors have filed a roughly $5 billion civil lawsuit in response to the accident.

Mr. Vescovi, 45, joined Samarco in his early 20s and rose to CEO in 2012. Before the dam break, he frequently touted the company's environmental record and commitment to "sustainability." A year before the accident, Brazilian environmental magazine Ecoló gico named Mr. Vescovi the country's "best businessman" and gave him an award for "sustainability and love of nature."

Roberto Lú cio de Carvalho, Samarco's chief commercial officer since 2001, will stand in for Mr. Vescovi, the company said.

Maury de Souza Jr., chief project and eco-efficiency officer, will take over Mr. Terra's duties.

Write to Paul Kiernan at [e-mail]

(END) Dow Jones Newswires

January 20, 2016 19:15 ET (00:15 GMT)

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