Brazil AG Expects Samarco Dam Spill Agreement Signed This Week

  • Attorney General sees deal likely to be signed on Thursday
  • Agreement is the first step for Samarco toward a restart

Brazilian authorities expect to sign a final agreement Thursday to cover damages for the Samarco dam spill in November, according to Luis Inacio Adams, the country’s attorney general.

Adams expects to finalize negotiations with Samarco Mineracao SA and its owners Vale SA and BHP Billiton Ltd., he told Bloomberg News Sunday in an interview. Samarco will be responsible for covering environmental, social and economic costs of the Nov. 5 dam burst that killed at least 17 people in the nation’s worst-ever environmental disaster.

BHP declined to comment Monday on the outcome of talks over the agreement. Vale didn’t immediately respond to an e-mailed request for comment.

Federal and local officials in Brazil are holding Samarco responsible for the deaths and environmental devastation caused when a dam collapse released billions of gallons of sludge into communities and waterways. The iron ore venture will cover costs of social and environmental programs, rather than paying a set amount of 20 billion reais ($4.9 billion) that was originally sought, Adams said earlier this month.

Signing of a final agreement after weeks of negotiations is the first step for Samarco to be able to restart mining operations in the region, Adams said previously. Vale and BHP must serve as guarantors of the eventual agreement, he said last month.

Vale and BHP both lowered their full-year iron ore production forecasts on the halt to their joint venture. Samarco, which was the world’s second-largest producer of iron-ore pellets, had an annualized output rate of about 30 million metric tons in September.

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