Vale, BHP asked to pay off Samarco’s full $9.5bn debt
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Vale and BHP asked to pay off Samarco’s full $9.5bn debt

19 Aug 2021 (Last Updated August 19th, 2021 12:07)

Brazilian prosecutors believe the two miners BHP and Vale are responsible for the 2015 Brazilian dam disaster.

A bankruptcy court has reportedly received a request from Brazilian prosecutors to compel miners Vale and BHP Group to fully settle their $9.47bn debt related to the Samarco dam disaster.

According to a court document reviewed by Reuters, the prosecutors believe the two miners, who jointly own Brazilian miner Samarco Mineracao, are responsible for the 2015 Brazilian dam collapse.

The 2015 breach of the Fundão tailings dam at the Samarco-owned Germano mining complex killed 19 and resulted in widescale pollution of one of Brazil’s largest river basins.

Samarco was consequently burdened with borrowings of $10bn.

According to the latest document, Vale and BHP are also mulling a restraining order that would oblige them to cover their debt.

The prosecutors claim that bankrupt miner Samarco has been used by BHP and Vale to obtain immediate gains amid a price boom for iron ore.

These prosecutors were reported by the news agency as saying: “They chose to put at risk the lives of people who lived and worked there, as well as the environment, causing tragic consequences and incalculable damages.”

Although Samarco filed for bankruptcy protection in April 2021 amid struggles to restructure its debt, its creditors objected to the move in July citing them as ‘absurd’.

In a securities filing, Vale said: “The request attacks the clear letter of the agreements signed between the parties, to which the MPMG (prosecutors from Minas Gerais state) is a signatory, in addition to threatening the ongoing discussions and efforts to renegotiate the reparation measures for damage resulting from the Fundão dam collapse.”

BHP, however, said that it found bankruptcy protection a viable solution to help Samarco recover financially.