A Brazilian judge on Thursday ratified the
settlement Samarco and its owners, BHP Billiton and Vale SA, signed with
Brazil's government in March to cover damages for a deadly dam spill
last year, Vale said in a statement.
The move potentially saps some of the energy
from a separate $44 billion lawsuit filed by federal prosecutors on
Tuesday who criticized the settlement as insufficient.
The agreement will see Samarco, BHP and Vale
pay a government-estimated 20 billion reais ($5.6 billion) over 15 years
to cover and repair damages. Vale, however, has outlined it expects to
pay less than that due to the way the deal is structured, calculating
future payments depending on how much work remains to be done.
"It's a very important step because you remove
any uncertainty about the agreement's validity," said Marilene Ramos,
President of Brazil's federal environment agency Ibama which formed part
of the settlement.
"The programs outlined in the agreement can
now be implemented by the companies," Ramos added, referring to the
environmental reparation plan which includes work on sewage, landfill,
reforestation and water treatment.
The settlement has been strongly criticized by
federal prosecutors who called it little more than a "letter of intent"
in their lawsuit. "It is absolutely insufficient," said Jorge Munhós de
Souza, one of the prosecutors working on the case.
Samarco Chief Executive Roberto Carvalho told
Reuters the settlement and the lawsuit filed by prosecutors covers the
same ground.
"The agreement ratified today already carries
all the socio-economic and environmental reparations which this other
lawsuit proposes," Carvalho said.
He reiterated that he expects the Samarco
mine, closed after the disaster, to restart later this year, and that a
return to production is vital for the company to afford the terms of the
agreement. The settlement specifies that if Samarco cannot meet its
obligations, the cost of doing so falls to Vale and BHP.
BHP said on Friday progress was being made to
rebuild the communities worst-hit by the massive spill, and more than
5,2000 people affected in Mariana, Barra Longa and Rio Doce had received
emergency support cards.
The people of Bento Rodrigues, the village
most devastated by the mudslides, are set to vote on where to rebuild
their town, BHP said.
"While we cannot bring back the lives that
were lost, we continue to focus on ensuring that the families and
communities impacted by this tragedy are supported," Dean Dalla Valle,
BHP's senior executive in Brazil dealing with the disaster, said in a
statement.
Standard & Poor's said on Friday its
credit ratings on BHP, Vale and Samarco had not been affected by the $44
billion lawsuit by Brazil's public prosecutors, as it was too early to
say what financial impact it would have.
It said the same court that approved the March
settlement would decide on whether the prosecutors' lawsuit would
proceed. "The decision will also likely take into account the identified
damages and restoration costs that were covered by the agreement,"
S&P said.
BHP's shares, which have been pounded this
week partly due to the lawsuit, rose 1.7 percent on Friday in a weaker
broader market.
($1 = 3.55 reais)
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