Samarco has agreed to pay R$1bn ($260m) for initial cleanup following a burst dam at the company’s iron ore operation in the Brazilian state of Minas Gerais.

The company signed a commitment with Brazilian prosecutors to guarantee the allocation of this amount to an emergency fund.

Samarco is jointly owned by Vale and BHP Billiton.

"Samarco will manage the emergency fund in conjunction with the public ministry."

Under the commitment, funding would be offered for various emergency measures that include prevention, mitigation, remediation and compensation for environmental, as well as social effects of the massive dam failure incident.

According to BHP Billiton, Samarco will manage the emergency fund in conjunction with the public ministry, which will also select an independent auditor to audit the expenses of the fund.

The company has also signed a separate commitment with Espirito Santo authorities that will cover measures to prevent and mitigate socio-environmental impacts in the region.

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By GlobalData

As part of these measures, the company will ensure that water is supplied in affected areas, and will assess water quality in the Rio Doce basin, in addition to the recovery of fauna in the area.

The disaster occurred when the Fundao dam at Samarco’s Germano mining site near the town of Mariana in Minas Gerais ruptured on 5 November. It is believed that at least 17 people died from the disaster.