Brazil Dam Burst: After Agreement, Samarco Will Initially Pay R$ 1 Billion to Cover Emergency Expenses

11/17/2015 - 10h15

The mining company Samarco, responsible for the dam that burst in Mariana (Minas Gerais) on November 5, signed on Monday (16) a preliminary commitment with State and Federal prosecutors that sets a US$ 262 million (R$ 1 billion) deposit to cover costs of emergency measures and restoration of the damage caused by the mudslide.

Samarco's iron ore tailing dam that belongs to Brazil's Vale and Australian BHP caused destruction in neighbouring communities and polluted the Doce River, affecting at least nine municipalities.

The amount will be kept in a company's bank account and should be immediately used for repairs. Spending will be monitored by an independent auditing firm chosen by the Prosecution. The mining company will be required to submit monthly reports showing the money was used.

"This is a minimum emergency amount. It is a guarantee that the initial amount will be used. It does not exhaust and does not delimit what will be needed because right now you cannot measure the magnitude of the damage, "says prosecutor Mauro Ellovitch.

According to the Minas Gerais public prosecutor's office, future spending should also be covered by the company.

"We know the necessary amount can be much higher, but the commitment establishes a specific legal guarantee, which did not exist so far. The initial emergency amount is guaranteed," says prosecutor Carlos Eduardo Ferreira Pinto.

Translated by JULIANA CALDERARI

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