BHP Billiton share price dips as it approves $250m payout over Samarco disaster

 
Caitlin Morrison
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The Samarco disaster pushed BHP Billiton to a loss last year (Source: Getty)

BHP Billiton has approved a $250 (£192m) payout over the Samarco dam failure two years ago, and said a restart of operations at the mine is unlikely to take place this year.

The dam at Brazilian mine Samarco Mineracao, jointly owned by BHP and Vale, burst in November 2015, leaving 19 people dead.

BHP said today that of the total $250m approved, $174m will be used to fund the Renova Foundation for remediation and compensation programs, and will be offset against BHP's provision for the Samarco disaster.

In addition, a short-term facility of up to $76m will be made available to Samarco "to carry out remediation and stablisation work and to support Samarco's operations". Funds will be released to Samarco only as required, and subject to achievement of key milestones.

BHP said restarting operations at Samarco is "is subject to obtaining separate regulatory approvals and will occur only if safe, economically viable and has the support of the community".

"Resuming operations would also require government approvals, the granting of licenses by state authorities and the restructure of Samarco's debt," the company said. "Accordingly, operations at Samarco are unlikely to restart in 2017."

BHP has rejected criminal charges filed over the dam failure but the company faced one of the largest civil lawsuits Brazil has ever seen. The FTSE-listed firm is in negotiations to settle a 155bn Brazilian real (£36bn) and a 20bn real public civil claim. The court has now extended the deadline for negotiations until 30 October 2017.

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