RIO DE JANEIRO/MELBOURNE (Reuters) - Samarco [SAMNE.UL] and parent companies Vale SA and BHP Billiton Ltd have signed a deal with Brazilian authorities that settles a 20 billion reais ($5.30 billion) lawsuit related to a 2015 dam burst that killed 19 people, Vale and BHP said on Monday.

FILE PHOTO: The debris of the municipal school of Bento Rodrigues district, which was covered with mud after a dam owned by Samarco mine, is pictured in Mariana, Brazil, November 10, 2015. REUTERS/Ricardo Moraes/File photo

The agreement, signed by prosecutors from the federal government and the states of Minas Gerais and Espirito Santo, mandates improvements in governance for the Renova Foundation, created to help victims of the accident, Vale said.

In a separate statement, BHP said the agreement sets a two-year timeline to reach a settlement over a separate 155 billion reais lawsuit, which will remain suspended while the parties continue to negotiate. It did not give a timeline on licensing and when operations may resume.

“It’s good that it moves along closer to a resolution obviously, and potentially caps some of the risk around (the settlement), given the earlier numbers that had been put out there,” said portfolio manager Andy Forster of Sydney’s Argo Investments, which has holdings in BHP.

“But it’s still uncertain around what the size of the total settlement could actually be.”

Brazil’s worst environmental catastrophe happened when a dam designed to hold back mine waste burst, leaving a trail of destruction for hundreds of kilometers.

Part of the terms of the agreement announced on Monday include a greater role for affected people in the governing bodies of the Renova Foundation.

The deal marks a key milestone for beleaguered Samarco, but it still faces a hefty debt load and little clarity on when it might receive key permits to resume operations.

“The positive is we don’t have a big compensation number which was the market’s concern,” said analyst Glyn Lawcock at UBS in Sydney. “The negative is that we still don’t have a definitive outcome or a definitive amount, or a timeline for restart.”

Vale has said it expects the company to resume operations in 2018 or early next year, but has pushed back forecasts several times.

The mine still needs two permits to reopen, and the lack of a clear timeline makes it harder for the companies to renegotiate the debt load, sources have told Reuters.

“It seems that if everything goes well, and the plaintiffs feel the community are being compensated fairly and the land is being rehabilitated...then there could be no more increase in cash out the door for BHP and Vale,” said UBS analyst Lawcock.

“But if the plaintiffs feel that as they move forward two years and there’s still things to be done...then there may be more money to be spent, is our understanding.”

($1 = 3.7753 Brazilian reais)</s>BHP Billiton has reached a deal with prosecutors in Brazil that will put a two-year pause on compensation claims arising from the Samarco mining disaster of 2015 that left 19 people dead.

The agreement means the FTSE 100 mining giant will escape an imminent fine and could pave the way for the iron ore mine’s eventual restart.

Under the deal the Brazilian government and state and federal prosecutors will roll their competing claims into one definitive settlement that will cover compensation to victims’ families as well as extensive remediation work in the affected area.

In November 2015 two villages were destroyed when a dam at the mine co-owned by BHP and Brazilian company Vale burst, sending...</s>Rio De Janeiro/Melbourne — Samarco and parent companies Vale and BHP Billiton have signed a deal with Brazilian authorities that settles a 20-billion reais ($5.30bn) lawsuit related to a 2015 dam burst that killed 19 people, Vale and BHP said on Monday.

The agreement, signed by prosecutors from the federal government and the states of Minas Gerais and Espirito Santo, mandates improvements in governance for the Renova Foundation, created to help victims of the accident, Vale said.

In a separate statement, BHP said the agreement set a two-year timeline to reach a settlement over a separate 155-billion reais lawsuit, which would remain suspended while the parties continued to negotiate.

"It’s good that it moves along closer to a resolution obviously, and potentially caps some of the risk around [the settlement], given the earlier numbers that had been put out there," said portfolio manager Andy Forster of Sydney’s Argo Investments, which has holdings in BHP.</s>BHP Billiton Brasil, the miner Vale and Brazilian public authorities have reached an agreement to settle a $US5.30 billion lawsuit related to a dam failure in 2015 that killed 19 people and destroyed several towns.

Under the agreement, announced this morning, the mining companies have agreed to establish a fund designated for clean-up costs, remediation works and compensation, relating to the impacts of the Fundao tailings dam disaster at the Samarco joint venture.

In a statement BHP said the agreement “enhances community participation in decisions related to the remediation and compensation programs,” while also establishing a process to progress settlement of a BRL155 billion (about $US41.5 billion) Civil Claim.

BHP said the new “Governance Agreement” was conditional on Brazil’s federal government signing the deal, and was also subject to ratification by the 12th Federal Court of Minas Gerais.

The new agreement also allows for the $US41.5 billion civil claim to be suspended for two years, after the ratification of the new governance agreement.</s>MELBOURNE (dpa-AFX) - Vale SA (VALE) and BHP Billiton Ltd. (BHP.AX, BLT.L, BBL, BHP), the owners of Brazilian mining company Samarco Mineracao SA, said that they agreed with Brazilian authorities to suspend for two years a 155 billion real or $41 billion civil claim over the catastrophic 2015 collapse of a tailings dam while talks continue.



The companies, federal prosecutors and the governments of the states of Minas Gerais and Espirito Santo will also ask to dismiss a separate civil claim, for 20 billion reais. The entire agreement needs to be approved by a federal court and by the federal government.



The dam, owned by Samarco and located in the Brazilian state of Minas Gerais, collapsed in November 2015, resulting in the deaths of 19 people and polluting more than 400 miles of waterways. Samarco Mineração S.A., jointly owned by BHP Billiton Brasil Ltda and Vale S.A, shut down operations following the accident.



During the two year period, the parties will work together to design a single process for the renegotiation of the Programs and progress settlement of the 155 billion reais Civil Claim. The renegotiation process will take into account the principles and rules established under the Framework Agreement, and will be aimed at improvement of the Programs, with the involvement of the affected communities.



The renegotiation of the Programs will be based on certain agreed principles, such as full reparation consistent with Brazilian law, the requirement for a technical basis for any proposed changes, the findings of the socio-economic and socio-environmental experts appointed by both the Companies and the Prosecutors, and consideration of the feedback from the Local and Regional Commissions.



The two civil suits, for 20 billion reais and for 155 billion reais, generated uncertainty over the final amount the companies will have to pay as deadlines for resolutions were postponed. With the smaller suit expected to be dismissed and the other talks extended, the agreement is a step in the right direction, but it doesn't clear up some key questions, some analysts reportedly said.



Copyright RTT News/dpa-AFX</s>PERTH (miningweekly.com) – Mining giant BHP and its joint venture partner Vale have reached an agreement with the Brazilian government to extinguish a 20-billion reais ($5.3-billion) lawsuit relating to the 2015 dam failure at the Samarco operation, which claimed 19 lives.

The agreement allows the mining companies more time to settle a larger 155-billion reais ($41.5-billion) civil claim, brought by Brazil’s federal prosecutors in May 2016, seeking social, environmental and economic compensation for the country’s worst-ever environmental disaster.

The governance agreement between Samarco, BHP, Vale, the federal government and the states of Espirito Santo and Minas Gerais, announced on Monday, provides for the suspension of the 155-billion reais claim for two years.

During this period, the parties have agreed to design a single process for the renegotiation of the March 2016 framework agreement and to progress the settlement of the civil claim.

The agreement recommends improvements in governance for the Renova Foundation, which was established to undertake environmental and socioeconomic programmes to provide compensation for damages caused by the dam failure.

The parties have also agreed to enhanced community participation in decisions relating to the 42 remediation and compensation programmes that were developed following the dam failure, which destroyed several communities.

Despite the agreement, Samarco operation’s fate remains uncertain, as it requires two permits to resume operations.

Operations were suspended in November 2015, after the collapse of the iron-ore tailings dam.</s>Samarco Mineração and its owners Vale and BHP Billiton Brasil have signed an agreement with Brazilian authorities to settle a BRL20bn ($5.30bn) lawsuit pertaining to the Samarco dam disaster that took place in 2015 in the Brazilian state of Minas Gerais.

The agreement calls for improvements to be made in governance for the Renova Foundation, which was formed to support victims of the fatal dam accident that left at least 17 people dead.

It also places a two-year timeline for the settlement of a separate BRL155bn ($41bn) lawsuit, which will stay suspended to allow the concerned parties continue with their negotiations.

The Brazilian authorities which signed the agreement with the mining firms include the Federal and State Prosecution offices, the Federal Public Defenders’ office and the State Public Defenders’ offices of Minas Gerais and Espírito Santo and the Federal Attorneys’ office and State Attorneys’ offices of Minas Gerais and Espírito Santo.

Additionally, the signed agreement ends relevant lawsuits, including the Public Civil Action of BRL20bn ($5.3bn), filed by the Brazilian government and the Minas Gerais and Espírito Santo governments.

Vale CEO Fabio Schvartsman said: “The Agreement is important because it demonstrates a convergence of interests between the parties, Vale, BHP Brasil, Samarco, the Federal Prosecution offices, the Federal and State Attorneys’ offices and the Federal and State Public Defenders’ offices, representing a further improvement for the affected people, as it consolidates and broadens the scope of the actions that were already being implemented by the Renova Foundation.”

The agreement reached by the parties is subject to the Brazilian government signing the agreement. It is also subject to ratification by the 12th Federal Court of Minas Gerais.

The lawsuits relate to the 5 November 2015 accident when a dam constructed in Bento Rodrigues to store iron ore waste of the Samarco mine collapsed following a massive failure. As a result, flooding took place in nearby towns leading to several casualties and injuries.</s>RIO DE JANEIRO (Reuters) - Samarco [SAMNE.UL] and parent companies Vale SA VALE5.SA and BHP Billiton Ltd (BHP.AX) have signed a deal with Brazilian authorities that settles a 20 billion reais ($5.30 billion) lawsuit related to a 2015 dam burst that killed 19 people, Vale and BHP said on Monday.

The agreement, signed by prosecutors from the federal government and the states of Minas Gerais and Espirito Santo, mandates improvements in governance for the Renova Foundation, created to help victims of the accident, Vale said.

In a separate statement, BHP said the agreement sets a two-year timeline to reach a settlement over a separate 155 billion reais lawsuit, which will remain suspended while the parties continue to negotiate.

Part of the terms of the settlement announced on Monday include a greater role for affected people in the governing bodies of the Renova Foundation.

The agreement represented a key milestone for beleaguered Samarco, but it still faces a hefty debt load and little clarity on when it might receive key permits to resume operations.

Vale has said it expects the company to resume operations in 2018 or early next year but has pushed back forecasts several times.

The mine still needs two permits to reopen, and the lack of a clear timeline makes it harder for the companies to renegotiate the debt load, sources have told Reuters.</s>RIO DE JANEIRO (Reuters) - Samarco and parent companies Vale VALE5.SA and BHP Billiton (BHP.AX) signed a deal with Brazilian authorities that settles a 20 billion real ($5.30 billion) lawsuit related to a 2015 dam burst that killed 19 people, Vale said on Monday.

The agreement, signed by prosecutors from the federal government and the states of Minas Gerais and Espirito Santo, mandates improvements in governance for the Renova Foundation, created to help victims of the accident, Vale said.</s>BHP and its joint-venture partner Vale have reached a framework agreement with Brazilian prosecutors to negotiate a settlement of a $A55.35 billion claim relating to the fatal 2015 Samarco mine disaster.

BHP says an earlier 20 billion real ($A7.14 billion) civil claim will be dismissed and that the companies will negotiate settlement of a 155 billion real ($A55.35 billion) claim, which will be suspended for two years to allow talks.

"The renegotiation process will take into account the principles and rules established under the framework agreement, and will be aimed at improvement of the programs, with the involvement of the affected communities," BHP said in a statement on Tuesday.

The tailings dam collapse at the Samarco mine killed 19 people and led to widespread environmental damage.

BHP chief external affairs officer Geoff Healy called the signing of the agreement "a good step forward".

"We have a framework that brings all of the parties together, where we can work toward improving and refining the remediation and compensation process," Mr Healy said.

"The governance agreement creates a more stable environment for ongoing work and brings more community members and prosecutors into the process."

An investigation by geotechnical specialists in 2016 found the deadly dam collapse was the result of a series of design and drainage issues over a number of years.

The disaster also caused a massive spill of waste material, polluted a major river and displaced several small communities.

Operations at Samarco have remained suspended as talks continue with the government to obtain the required environmental licences.

At 1150 AEST, BHP's ASX-listed shares were down 47.5, or 1.4 per cent, at $32.505 - broadly in line with the overall resources sector.
International mining firm BHP Billiton signs an agreement with Brazilian authorities over criminal culpability and civil compensation liability over a mine site collapse that killed nineteen. The deal halts litigation for up to two years but does not confirm a final amount for a settlement.