Brazil’s Looming Wet Season Poses New Samarco Risks, BHP Warns

  • Potential for further release of tailings material amid rain
  • Samarco venture named in more than 23,000 small claims: BHP

BHP Billiton Ltd., the world’s biggest miner, warns Brazil’s impending wet season may result in further environmental damage due to the failed Samarco dam, carrying the risk of new fines and legal claims.

Work is underway to reinforce dam structures to help contain tailings as the November-to-April rainy season arrives in Brazil, BHP said Wednesday in its annual report. New releases or movement of tailings could result in further harm to the environment and have an effect on the feasibility and timing of a restart of the Samarco joint venture, it said.

“A large portion of the works are scheduled to be completed before the next wet season commences,” BHP said in its report. “The potential nonetheless remains for further release, or downstream movement, of tailings material during this season, which may result in additional claims, fines and proceedings.”

At least 19 people were killed and 700 people made homeless when a tailings dam failed last November at Samarco in Brazil’s Minas Gerais state, an incident described by authorities as the country’s worst-ever environmental disaster.

BHP and joint Samarco owner Brazil’s Vale SA said in July they would book charges totaling more than $2 billion related to cleanup work. Total potential liabilities related to legal proceedings and enforcement actions “cannot be reliably estimated at this time,” BHP said in its report. The Samarco joint venture has been named in more than 23,000 small claims in addition to public civil claims made by federal and regional authorities in Brazil, it said.

Vale regards a restart of Samarco operations as likely by the end of next year, head of ferrous minerals Peter Poppinga said in an interview this month.

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