BHP Billiton will provide $250m in financial support to Brazilian mining company Samarco Mineração and Renova Foundation to deal with remediation and compensation programs related to Samarco dam failure.
The company has approved $174m for Renova Foundation to be used for remediation and compensation programs identified under the framework agreement, while $76m for Samarco to carry out remediation and stablisation work and support its operations.
In January this year, Samarco and its shareholders, Vale and BHP Billiton Brasil have signed a preliminary agreement with the Federal Prosecutors’ Office in Brazil in relation to the Samarco dam failure.
The agreement outlines the process and timeline for negotiation of a settlement of $47.5bn and $6.1bn public civil claims relating to the dam failure.
In November 2015, two dams in Mariana owned by Samarco that contained by-products of iron mining collapsed, resulting a severe damage to the sorrounding environment.
The mix of contaminated water and mud has flowed to nearby rivers such as the Rio Doce, and contamination lead to suspension of water supply to various cities.
In addition, the preliminary agreement outlines the appointment of experts to advise the federal prosecutors in relation to environmental and socioeconomic impact assessment and review of the programs that will implemented by the Renova Foundation under the terms of the deal.
According to BHP Billiton, the court extended the final date for negotiation of a settlement until 30 October and restart of operations at Samarco is subject to obtaining separate regulatory approvals.
BHP Billiton said: "Resuming operations would also require government approvals, the granting of licenses by state authorities and the restructure of Samarco’s debt. Accordingly, operations at Samarco are unlikely to restart in CY2017."