BHP, Vale Settle Over Brazil Dam Disaster

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(RTTNews.com) - Vale SA ( VALE ) and BHP Billiton Ltd. (BHP.AX, BLT.L, BBL, BHP), the owners of Brazilian mining company Samarco Mineracao SA, said that they agreed with Brazilian authorities to suspend for two years a 155 billion real or $41 billion civil claim over the catastrophic 2015 collapse of a tailings dam while talks continue.

The companies, federal prosecutors and the governments of the states of Minas Gerais and Espirito Santo will also ask to dismiss a separate civil claim, for 20 billion reais. The entire agreement needs to be approved by a federal court and by the federal government.

The dam, owned by Samarco and located in the Brazilian state of Minas Gerais, collapsed in November 2015, resulting in the deaths of 19 people and polluting more than 400 miles of waterways. Samarco Mineração S.A., jointly owned by BHP Billiton Brasil Ltda and Vale S.A, shut down operations following the accident.

During the two year period, the parties will work together to design a single process for the renegotiation of the Programs and progress settlement of the 155 billion reais Civil Claim. The renegotiation process will take into account the principles and rules established under the Framework Agreement, and will be aimed at improvement of the Programs, with the involvement of the affected communities.

The renegotiation of the Programs will be based on certain agreed principles, such as full reparation consistent with Brazilian law, the requirement for a technical basis for any proposed changes, the findings of the socio-economic and socio-environmental experts appointed by both the Companies and the Prosecutors, and consideration of the feedback from the Local and Regional Commissions.

The two civil suits, for 20 billion reais and for 155 billion reais, generated uncertainty over the final amount the companies will have to pay as deadlines for resolutions were postponed. With the smaller suit expected to be dismissed and the other talks extended, the agreement is a step in the right direction, but it doesn't clear up some key questions, some analysts reportedly said.

Read the original article on RTTNews (http://www.rttnews.com/2908211/bhp-vale-settle-over-brazil-dam-disaster.aspx)

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This article appears in: World Markets , Stocks , Economy , Oil , Commodities
Referenced Symbols: VALE

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