BHP Billiton and Vale iron out Samarco dispute

Brazilian miner Vale is confident that a disagreement with Samarco joint venture partner BHP Billiton over the restart of operations at the iron ore mine will soon be resolved.

Speaking at Vale’s annual investor day on Tuesday, the company’s general counsel Clovis Torres outlined hopes to restart mining in mid-2017 at Samarco, which has been closed since a tailings dam collapse killed 19 people in November last year. The dam burst was blamed on drainage and design flaws following a geotechnical investigation.

“We’re still maintaining mid next year as the target for Samarco to return to its operations,” Torres said in a Wall Street Journal report.

He said the two companies, which are facing multiple lawsuits over the incident, expected to reach an agreement on the matter in December.

BHP Billiton last week approved a $US181 million funding package to aid remediation of the Brazilian mine. The funding is part of a $US1.2 billion provision that it plans to invest in the troubled mine.

According to the Wall Street Journal report, obtaining a new license for the restart is not likely to be easy, with regulators hesitant to sanction the dam Samarco had previously used to store its waste.

Vale’s preferred alternative has been to have Samarco fill one of its exhausted mine pits, a solution initially opposed by BHP Billiton.

“We agreed that we could go ahead and put the license [request] forward to the authorities with Vale’s infrastructure regardless of us signing an agreement, because it’s the only way that we feel is possible,” Torres said.

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