Brazil said it would seek 20 billion reais ($A7.28bn) in damages from BHP and Vale, the owners of the Samarco iron ore miner, after a dam owned by Samarco burst, killing at least 13 people and dumping millions of tons of mud and waste in the Rio Doce valley.
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Mining shares were lower in London trade with shares in BHP Billiton down by 3.1% while Rio Tinto lost 3.2%. Both BHP and Vale own a 50 percent stake in the Samarco venture.
On Friday, Vale and BHP said they would establish a voluntary fund for efforts to rehabilitate the Rio Doce river system, although the mining giants didn’t say how much money would be available.
The disaster is the latest challenge for BHP Billiton, whose shares have more than halved this year on the back of weak commodity prices.
Several other research firms have also weighed in on BLT. The Company mines, extracts and produce aluminium, coal, copper, iron ore, manganese, nickel, silver and uranium, and oil and gas.
The market price of iron ore, one of BHP Billiton’s biggest sources of revenue, has fallen 66% to about US$44 per metric tonne from around US$130 in early 2014 as China’s demand for the steel input fell. The broker also cut its target saying BHP’s dividend policy was coming under increasing pressure due to declining cash flow. Where water supplies have been affected, alternative water supplies are being provided by Samarco, working with local authorities. New reports have confirmed that arsenic and mercury have been found in the river’s water, which BHP and Samarco still deny.
“Samarco has advised that the tailings material released as a result of the breach of the Fundão and Santarém dams is considered to be non-reactive and would be geochemically stable when introduced to the river system or ocean”.
“Samarco continues to work with the Government authorities in Brazil to relocate displaced people from temporary accommodation to rented housing”, BHP said in the statement.
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It said that based on Brazilian standards, analysis by SGS Geosol showed the tailings are not hazardous to human health. The company called the materials “non-reactive” and “geochemically stable”. Fish died and drinking water supplies for a quarter of a million people had to be closed off.
