Brazil to sue BHP, Vale for $7bn over mine burst

PanARMENIAN.Net - Brazil's government is preparing to sue mining giants Vale, BHP Billiton and their joint venture Samarco Mineração SA for 20 billion Brazilian reais ($7.19 billion) in response to a catastrophic dam failure earlier this month, officials say, Business Spectator reports.

The civil suit is expected to be filed on Monday, November 30, the Attorney General's office said in a news release. The proceeds are intended to create a fund to help recovery efforts in the Rio Doce, a major river that was contaminated with mud and toxic mining waste in the wake of the November 5 collapse of Samarco's dam in Minas Gerais.

"The figure, however, is preliminary and could be raised over the judicial process, since the environmental damages of the mud's arrival at the ocean have not yet been calculated," the Attorney General's office said.

Brazil's Environment Ministry said it expects the revitalisation efforts in the Rio Doce basin to take at least 10 years. Officials said the government may seek to hire workers in the communities affected by the disaster, which is believed to have devastated fisheries and other economic activity along the river.

The pending lawsuit represents by far the biggest government response yet to what is widely considered one of Brazil's worst environmental disasters. Environmental agency Ibama had previously announced a fine of 250 million reais, while prosecutors secured a preliminary commitment from the mining companies to create a 1-billion-real emergency fund.

Brazilian authorities have been criticised for their slow reaction to the catastrophe that, in the eyes of many, belied politicians' dependence on the mining industry for local job creation and tax revenue. The mayor of Mariana, where Samarco's dam stood, said shortly after the accident that his town depends on mining for 80 per cent of its revenue, making it "hostage" to the industry.

Vale, Samarco's 50 per cent owner, is the country's top exporter and is known to donate millions of dollars to political campaigns.

Vale and BHP Billiton have attempted to distance themselves legally from Samarco--a limited liability company they say is independently run--while trumpeting their contributions to recovery efforts. The two companies said on Friday that they plan to create a "volunteer and nonprofit fund" with Samarco to clean up the Rio Doce.

Attorney General Luiz Inácio Adams said authorities are open to the possibility of an agreement whereby the mining companies propose initiatives themselves.

"The company has announced measures that show it is preoccupied with recovering its image before society for the damage it caused, which indicates there is an understanding attitude toward the government," Mr Adams was quoted as saying in the news release. "If the willingness doesn't come, what we'll ask the judge to do is to block the money by court order."