Samarco inks deal with Brazil authorities over dam disaster

Samarco inks deal with Brazil authorities over dam disaster

By Marta Nogueira

RIO DE JANEIRO (Reuters) - Samarco [SAMNE.UL] and parent companies Vale SA and BHP Billiton Ltd have signed a deal with Brazilian authorities that settles a 20 billion reais ($5.30 billion) lawsuit related to a 2015 dam burst that killed 19 people, Vale and BHP said on Monday.

The agreement, signed by prosecutors from the federal government and the states of Minas Gerais and Espirito Santo, mandates improvements in governance for the Renova Foundation, created to help victims of the accident, Vale said.

In a separate statement, BHP said the agreement sets a two-year timeline to reach a settlement over a separate 155 billion reais lawsuit, which will remain suspended while the parties continue to negotiate.

Part of the terms of the settlement announced on Monday include a greater role for affected people in the governing bodies of the Renova Foundation.

The agreement represented a key milestone for beleaguered Samarco, but it still faces a hefty debt load and little clarity on when it might receive key permits to resume operations.

Vale has said it expects the company to resume operations in 2018 or early next year but has pushed back forecasts several times.

The mine still needs two permits to reopen, and the lack of a clear timeline makes it harder for the companies to renegotiate the debt load, sources have told Reuters.

($1 = 3.7753 Brazilian reais)

(Reporting by Marta Noguiera; Editing by Richard Chang and Lisa Shumaker)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date: Jun 26, 2018 05:06 AM

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