- Design changes, faulty construction major causes of disaster
- Several Samarco employees still facing criminal charges
Last year’s deadly dam collapse at BHP Billiton Ltd. and Vale SA’s Brazilian iron mine was caused by part of the structure liquefying after a series of misguided efforts to fix structural defects hindered drainage.
That’s the finding of a panel headed by Canadian engineer Norbert Morgenstern. The dam at the Samarco joint venture used an upstream design, in which discharged tailings become the foundation for future embankment raises. As walls were raised and design changes made, saturation of the site increased, Morgenstern said Monday in a webcast. Three small earth tremors on the day of the Nov. 5 spill may have accelerated the event, he said.
The panel was restricted to examining technical reasons rather than assigning blame or discussing key maintenance decisions. Morgenstern avoided questions on whether there was an increase in the rate of embankment raises before the spill to accommodate expanded output amid plummeting commodity prices.
“The panel restricted its work in explaining the physical basis of the failure," he said, adding that investigators avoided "any evaluation of alternates related to design or construction."
The rupture sent billions of gallons of sludge through the Rio Doce valley, killing as many as 19, leaving hundreds homeless and contaminating waterways in two states in what the government described as Brazil’s worst environmental disaster.
“There is no reason to believe that anyone at BHP had any information that indicated the dam was in danger of collapsing,” Chief Commercial Officer Dean Dalla Valle told to reporters on a call after the report was released.
BHP gained 1.2 percent to A$21.19 at 9:29 a.m. in Sydney. It has declined 9 percent since the incident last year.
The report states that construction defects as well as design changes in 2011 and 2012 contributed to the saturation of parts of the dam meant to remain solid and secure. Between 2011 and 2014, as iron ore prices fell, Samarco ramped up output as net debt more than doubled.
Samarco and its owners hired Cleary Gottlieb Steen & Hamilton LLP to investigate the accident and the New York-based law firm set up an independent panel. Its chairman, Morgenstern, chaired a similar panel that investigated Canada’s Mount Polley mine spill.
For the venture and its owners, the stakes are high as they battle to convince regulators to renew licenses that would enable Samarco to start mining again and generate the cash needed to help pay for repairs and compensation and to repay lenders. There are also unfolding civil and criminal legal processes.
The original designer of the failed Samarco dam, Joaquim Pimenta de Avila, said he was relieved to see that the probe didn’t try to blame him for faulty design and concurred with his own analysis, that improper design alterations were ultimately what caused the breach.
“The alterations modified the concept of the design,” Pimenta said by telephone in Belo Horizonte, adding that he issued warnings that the structures were weakening. "There were obvious problems in 2013. It became deformed because they built in incorrectly."
In March, Samarco Mineracao SA, as the venture is formally known, along with Melbourne-based BHP and Rio-based Vale, signed a multibillion-dollar settlement with the Brazilian government and are working with communities and authorities on repairs and compensation.
Many unanswered questions remain. A criminal investigation into whether Samarco executives should be held responsible for the deaths remains open as police pursue accusations that risks were ignored and preventative measures and warning systems were inadequate. Investigators have also alleged that a strategy of increasing production amid falling commodity prices led Samarco to heighten at least one dam too quickly.
“There is no evidence that I’m aware of that anyone put production over safety,” Dalla Valle said on the Tuesday call. “The board had no reasons to believe that the dam was in immiment risk of failure.”
Judicial ratification of the settlement struck in March was overturned this month as a group of prosecutors pushes for a much higher compensation package.
A spokesman for BHP said that roles played by individuals in the Samarco accident didn’t fall within the scope of Cleary Gottlieb’s investigation. The company has since reviewed ten of its dams that had the largest risk of exposure to communities or employees and will complete a full audit of all dams in its portfolio in time, Dalla Valle said.
For state prosecutor Carlos Eduardo Pinto, who has long been critical of the companies’ response to the disaster, the probe did little to answer questions surrounding the case.
Vale Chief Executive Officer Murilo Ferreira and Samarco CEO Ricardo Carvalho joined Dalla Valle earlier in introducing Morgenstern at Monday’s press event. They reiterated apologies and commitments to compensation to those affected, without commenting directly on the report’s findings.