Brazil Court Orders Deposit for Future Damages in Dam Collapse -- Update

By Benjamin Parkin

RIO DE JANEIRO--Troubled Brazilian miner Samarco Mineração SA and its shareholders Vale SA and BHP Billiton Ltd. have been ordered to deposit 1.2 billion reais ($348 million) to guarantee future damage payments after last year's fatal dam collapse, Vale said Friday.

A Brazilian court ordered Samarco and its shareholders to make the payment within 30 days, also giving them 90 days to prove that leakage from the Fundão tailings dam have stopped definitively and six months to present a plan to clean up waste from the failure.

The dam collapse at the company's iron ore operation in November 2015 killed 19 people and resulted in the country's worst-ever environmental disaster, polluting more than 400 miles of waterway.

Samarco, staring at billions in possible reparatory payments, has struggled to raise cash after Brazilian authorities yanked its environmental licenses and its activities ground to a halt. The company reached a tentative settlement with the Brazilian government in March, only to see federal prosecutors file a 155 billion real ($45 billion) lawsuit against the company two months later.

Vale and BHP have agreed to help Samarco in covering costs of repairing the social and environmental damages from the collapse.

"Vale will adopt all measures to guarantee its right of defense within the legal period and will continue to support Samarco to accomplish reparatory measures," said Vale in Friday's securities filing.

In a statement, Samarco said it is "aware of the decision and is examining possible measures."

BHP did not immediately respond to requests for comment.

Write to Benjamin Parkin at [e-mail]

(END) Dow Jones Newswires

November 11, 2016 08:17 ET (13:17 GMT)

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