BHP Says Brazil's Superior Court Order Reinstates BRL20 Bln On Samarco Claim

(RTTNews) - BHP Billiton (BHP.AX, BLT.L, BBL, BHP) said that the Superior Court of Justice in Brazil issued an interim order that reinstates a BRL20 billion or $6.2 billion civil claim by the country's authorities against the Samarco iron-ore joint venture after its deadly dam collapse.

BHP, which jointly owns the Samarco venture with Brazil's Vale SA, intends to appeal the decision of the Superior Court of Justice.

"Samarco will continue to support the long-term recovery of the communities and environment affected by the dam failure…. On 30 June 2016, the Superior Court of Justice in Brazil issued an interim order suspending the decision of the Federal Court of Appeal to ratify the Framework Agreement," BHP Billiton said in a statement.

On 2 March 2016, BHP Billiton announced that an agreement had been entered into between Samarco Mineração S.A, Vale S.A and BHP Billiton Brasil LTDA with the Federal Government of Brazil, the States of Espirito Santo and Minas Gerais and certain other public authorities or Brazilian Authorities.

The Framework Agreement provides for the restoration of the environment and communities affected by the Samarco dam failure on 5 November 2016 and suspension of the civil public claim commenced on 30 November 2015 by the Brazilian Authorities against Samarco, Vale and BHP Billiton Brasil which sought the establishment of a fund of up to BRL20 billion in aggregate for clean-up costs and damages relating to the dam failure.

The Framework Agreement was subject to ratification by the courts in Brazil. On 5 May 2016, the Framework Agreement was ratified by the Federal Court of Appeal in Brasilia.

The Federal Prosecutors' Office appealed against the ratification of the Framework Agreement.

Separately, Bloomberg reported that Vale SA and BHP Billiton Ltd.'s Brazilian mining joint venture is seeking capital injections from its owners as it runs out of cash after a deadly accident halted output.

The iron-ore company's cash will expire by August and it needs contributions from Vale and BHP to stay afloat. Samarco, as the venture is known, has already started exploring ways to restructure about $1.6 billion in bank loans and may seek to put off bond payments until it can resume operations, the report said citing people familar with the matter.

Mining has been halted since November, when a tailings dam collapse killed as many as 19 people and contaminated waterways in two states. After reaching a multibillion-dollar settlement with the government in March, the company hoped to secure licensing to resume operations this year, but probably will have to wait until 2017. Stockpiled ore has run out.