BHP-Vale’s Samarco Planning To Reopen Iron Ore Mining Site In Brazil Before First Anniversary Of Dam Disaster

Samarco Mineração SA, the Brazilian mining company responsible for the fatal dam tragedy in the country last November, is likely to resume operations at the mining site before the first anniversary of the disaster, Roberto Carvalho, Samarco's interim CEO, told Reuters Thursday. The report comes a week after the company announced that it would pay $6.2 billion in damages for what is considered to be Brazil’s worst environmental disaster.

Carvalho said the production of iron-ore pellets for the initial two to three years at the mining facility in Mariana city of southeastern Minas Gerais state would be reduced to 19 million tons annually. Prior to the dam burst, the company used to produce about 30 million tons of iron-ore pellets every year.

“All our focus is turning to the restart,” Carvalho reportedly said. “We have talked to our clients, they have given us all the help possible and are awaiting the return of Samarco.”

Samarco has agreed to pay $1.1 billion for investments aimed at providing compensation for irredeemable losses over the next three years and the remaining $5.1 billion will go to the clean-up costs and damages following the disaster, the company’s Australian co-owner BHP Billiton Ltd. said last week, in a statement. The agreement is yet to receive a court approval.

The fatal dam burst, which occurred on Nov. 5, 2015, caused thick red mud to roll down the hilly area, killing 17 people and leaving two others missing. The mining waste buried lorries and cars while the burst caused significant damage to the environment. The cause of the incident is not yet known.

However, engineer Joaquim Pimenta de Ávila, who worked on the dam between 2008 and 2012, told the Wall Street Journal in January that he cautioned the company about structural problems to the dam a year before the tragedy.

Pimenta de Ávila, a prime witness in a criminal investigation of Samarco, told the newspaper that he suggested the world’s second-largest producer of iron-ore pellets to raise a buttress at the base of the dam and design it in a way so that it could fortify the dam even in the worst-case scenario. Samarco’s lawyer reportedly said the company did not get any warning of an “imminent” break from any of its consultants.

Brazil’s Federal Police accused BHP and the Brazilian co-owner of Samarco, Vale SA, of environmental crime in the incident. Seven company executives and engineers were charged along with consulting company Vogbr, which sends technical reports on the stability of the dam to Samarco. Samarco’s CEO Ricardo Vescovi, who is reportedly on leave of absence for a period of two months starting from February, was among those indicted.