Brazil, Samarco edge toward dam agreement

  • 22/01/2016
The dam burst in Brazil devastated the surrounding environment and neighbouring housing areas (Reuters)
The dam burst in Brazil devastated the surrounding environment and neighbouring housing areas (Reuters)

Brazil's government and Samarco have moved closer to a deal to settle a 20 billion real (NZ$7.4 billion) lawsuit for damages related to a deadly November dam disaster, Brazil's attorney-general says.

The two sides met in Brazil recently and talks have "advanced significantly", with the likelihood that the outline of an accord can be completed by early February, Attorney-General Luis Inacio Adams told reporters after the meeting.

Brazil sued Samarco, a 50-50 joint venture between Brazil's Vale SA and Australia's BHP Billiton Ltd, for 20 billion reals after an iron ore tailings dam burst.

The resulting tsunami of mud roared through river valleys in two states, killing at least 17 and dumping mine waste as far away as the Atlantic Ocean.

It is considered Brazil's biggest ever environmental disaster. Samarco has been shut down since the dam burst.

"Negotiation of the agreement is under way and we made considerable progress today," Adams said.

"We agreed on the actions that have to be carried out. There was convergence between the companies and federal and state governments on what has to be done."

If an agreement is reached and financing is provided for 38 actions agreed to on Thursday to resolve the social and environment impact of the disaster, Samarco would be allowed to restart operations, Adams said.

Work should take up to 10 years and Samarco will not have to pay all at once, Adams added, saying Vale and BHP would have to guarantee Samarco's financial commitment to the recovery plan.

The company's new chief executive officer, Roberto Carvalho, said it did not have the funds available now, but told Reuters: "If it is operating again, Samarco will easily have enough funds."

Not all who attended Thursday's meeting were as positive as Adams, whose office needs to sign off on any accord.

Marilene Ramos, president of IBAMA, Brazil's environmental protection agency, said Samarco's initial proposal for dam-disaster remediation offered "much less" than she expected.

"The program that Samarco presented is a package of short-term actions focused on areas hurt by the disaster," she said.

"The part where they propose new actions we consider very incomplete, and we need faster action."