BHP Makes Funds Available to Brazil Foundation, Samarco Venture

MELBOURNE, Australia--BHP Billiton Ltd. (BHP.AU) will provide US$250 million in financial support to its Brazilian iron-ore mining operation and a foundation set up to handle remediation and compensation programs in the wake of the disastrous 2015 dam failure.

US$174 million will be used to fund the Renova Foundation, which would be offset against the provision for the Samarco dam collapse, and a short-term facility of up to US$76 million would be available to the mining venture with Vale SA (VALE) for stabilization work, but would be released only as required, BHP said Friday.

The collapse of a tailings dam at the mining operation in late 2015 released an avalanche of mud and mine waste that left 19 people dead and hundreds more homeless, and polluted hundreds of miles of rivers in southeast Brazil's Rio Doce basin.

A restart of the Samarco operations, which BHP said is unlikely this year, is subject to regulatory approvals, government approvals, the granting of licenses by state authorities and a restructuring of Samarco's debt.

In January, Samarco and equal shareholders BHP and Vale entered a preliminary agreement with federal prosecutors in Brazil over the dam failure that outlined the process and timeline for negotiating a settlement of about US$47.5 billion and about US$6.1 billion in public civil claims. A court has extended the final date for negotiation of a settlement until Oct. 30, BHP said.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

June 30, 2017 03:06 ET (07:06 GMT)