BHP Billiton approves Samarco funding as a restart edges closer

BHP Billiton has approved an additional US$181 million (AU$244 million) to fund remediation of the troubled Samarco iron ore mine in Brazil.

The funding is part of a US$1.2 billion provision the company previously stated it would invest at the mine, the site of a fatal disaster in November 2015 when a collapsed tailings dam killed 19 people. BHP’s joint venture partner at Samarco, Vale, is also providing funds for remediation.

BHP has also established a US$115 million short-term facility, which will be made available to Samarco for remediation and stabilisation work, as well as for operational support.

“Funds will be released to Samarco only as required and subject to the achievement of key milestones. The short-term facility allows BHP Billiton Brasil to preserve the value of its investment as options for restart to continue to be assessed,” BHP stated.

The company added that a restart at Samarco would only occur if it was safe and economic to do so and the necessary approvals had been obtained from Brazilian authorities.

BHP Billiton is facing an $8 billion lawsuit in Brazil over the incident, which was blamed on drainage and design flaws. The joint venture reached an agreement with the Brazilian government earlier this year to pay a minimum of US$1.7 billion in compensation over six years for the spill.

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