Brazil mining company ordered to pay $30 mn fine

Samarco Mineracao says it has enough cash to cover debt payments for at least two years without having to renegotiate or raise more money while it acts to rebuild its business after two dams burst, causing Brazil’s biggest environmental disaster to date.

BHP chairman Jac Nasser at the company’s AGM this morning.

Analysts estimate the overall clean-up bill in Brazil will be more than $1 billion.

“We will find out what went wrong and we will fix the environment so that the communities can get back to have a proper livelihood in the areas that they were in”. Since November 5th, the waste has been slowly working its way downstream, contaminating the drinking water of hundreds of thousands of people and submerging protected forests and habitats.

Mr Nasser said at this stage the company believes 11 people are dead and eight remain missing as the company’s board and management team supports Samarco with the response effort.

The spill contaminated a few 500 kilometers (310 miles) of the Doce River in Minas Gerais and the neighboring state of Espirito Santo, destroying crops and killing fish, turtles and other animals.

The joint venture owned by BHP Billiton Ltd and Vale SA is carrying out emergency work to reduce risk at the structures, the Belo Horizonte, Brazil-based company said in a statement on its website dated Wednesday.

The chief executive, Andrew Mackenzie, told the meeting it was an extraordinarily hard time for BHP but the company remained strong.

“It’s not clear that that was unusual or unwarranted or part of the problem”, he said.

UBS is forecasting a near 50 percent fall in BHP’s net earnings to $3.3 billion in 2015/16, about half the $6.49 billion the company paid out a year ago on dividends, while Goldman Sachs has said BHP needs to cut its dividend in half.

BHP’s progressive dividend policy, under which the company promises never to cut dividends, is under pressure, with investors fearing it will have to borrow heavily to fund the payout as the commodity downturn slashes earnings. “All of us recommit to making your company safer and our communities stronger”.

However, Mr Nasser is disappointed with the company’s low share price, adding that it was hard to give a definitive view of where the global economy was heading as major economies went through transition.