Samarco secures credit facility to support ops
Brazilian mining giant Vale said late Thursday that it intends to make available short-term facilities of up to US$53mn to pellet-maker Samarco to support its operations and to carry out repair works.
The funds will also be used to cover expenses related to experts named in an agreement signed on June 25 with Brazilian authorities without undertaking an obligation from Vale to Samarco, the company said in a release.
"In addition, given Samarco's current cash flow projections, shareholders will be called upon to fulfill its obligations, according to their stake in Samarco (50% each), under the agreement for the restoration of the environment and communities affected by the Samarco dam failure."
Vale said it expects to contribute about 557mn reais (US$145mn) in H2, with the amount offsetting the provision recorded in 2Q16.
In a separate note on Friday, BHP, the other 50% shareholder in Samarco, confirmed it will fund its part in the facilities, providing US$211mn by the end of this year. Of the amount, US$158mn will go to the Renova Foundation to undertake remediation and compensation programs related to the dam incident and up to US$53mn in support for the foundation and Samarco.
The move follows this month's agreement that settled a 20bn-real civil claim related to the Samarco dam collapse between the pellet-maker, its controlling shareholders and authorities. The agreement also suspends for two years a 155bn-real civil claim filed by federal prosecutors related to the accident.
The dam burst in November 2015 killed 19 people, 13 of them mineworkers. The tailings and sludge flowed hundreds of kilometers and polluted the Doce river (pictured) before reaching the sea. The spill is considered Brazil's worst environmental disaster ever.
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