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BHP and Vale get extension to Samarco negotiations

Staff Writer | October 31, 2017
BHP Billiton and ValSA have been given a time extension to strike a preliminary agreement with federal prosecutors in Brazil over the Samarco dam failure.
Samarco negotiations
Brazil   The dam failure in 2015
Samarco's dam failure in 2015 flooded a neighbouring village, contaminated a local river in the Minas Gerais state, and caused multiple deaths.

In January of this year, the 50:50 partners in the project entered into a preliminary agreement with the Federal Prosecutors' Office in Brazil, outlining the timeline for negotiations over public civil claims, one worth BRL155 billion, about GBP35.7 billion, and the other BRL20 billion, about GBP4.6 billion.

At the same time, the preliminary agreement suspends a BRL1.2 billion injunction order under the BRL20 billion civil claim. If the preliminary agreement can be finalised, then this claim will be suspended in its entirety. The courts have already suspended the BRL155 billion civil claim, including the BRL7.7 billion injunction request.

A settlement date was set for Monday by the court earlier this year after failing to reach an agreement under the prior deadline of the end of June.

However, on Monday the court approved an extension to the negotiations, allowing talks over the preliminary agreement to continue and for an agreement to be reached on "socioeconomic experts" that will advise the Federal Prosecutors.

The extension runs until November 16, with all suspensions of legal proceedings and injunctions remaining in place in the interim. BHP and Vale had originally hoped to have a finalised deal in place by the middle of 2017.