BHP Billiton update on Samarco

The Brazilian government announced on Friday plans to sue the two companies for $5.2 billion in clean-up costs and damages after the November 5 collapse of the dam at the Samarco iron ore mine.

Authorities have threatened a $7.2 billion legal suit over the mine disaster in the south-eastern state of Minas Gerais in Brazil, BHP Billiton says.

However, Reuters – citing an interview with Vania Somavilla, sustainability chief at Vale, reports that toxic materials such as arsenic were found in the water of the Rio Doce river days after the dam burst.

“Samarco continues to work with the Government authorities in Brazil to relocate displaced people from temporary accommodation to rented housing”, BHP said in the statement. The fund would be created gradually [Guardian report] as a percentage of the companies’ profits.

BHP Billiton said mining is still suspended at Samarco and clean up work has begun.

Londonderry public sector pensions are invested in a global mining company partly responsible for a mine at the centre of what’s been described as the worst environmental disaster in Brazilian history. BHP has stated that they still have not received a formal notice.

The world’s biggest miner added that “BHP Billiton confirms its commitment to supporting Samarco to rebuild the community and restore the environment affected by the breach of the dams”.

The overflow from the mine has now reached the Atlantic Ocean, with the potential environmental impact being monitored by all parties involved.

The mining giant has already announced a reserve to help fund cleanup efforts for the Rio Doce river system, that has been heavily polluted by runoff from the mine, with a recovery period of ten years forecasted.

The United Nations’ human rights agency said on Wednesday that the mud from the dam burst was toxic, contradicting claims by Samarco and mine co-owner BHP Billiton that the water and mineral waste posed no risk to human health. BHP Billiton’s share price, however, fell after JPMorgan cut its rating on the company’s stock to “underweight” from “neutral” and said it was factoring a 50 per cent reduction in its dividend. As a result of the high volume of sand and clay tailings material that moved through the river system, a large number of fish died due to reduced oxygen uptake.