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Rio de Janeiro: Brazilian state and federal prosecutors have announced the company responsible for one of the country's worst environmental disasters has agreed to pay a preliminary deposit bond of R$1 billion ($366 million) to cover compensation and clean-up costs after a torrent of mining mud killed at least 11 people and affected 15 million.
Two of Samarco's tailings dams burst on November 5, releasing a torrent of mining waste and burying a number of towns in the south-eastern state of Minas Gerais, including the worst affected, Bento Rodrigues, 40 kilometres downstream. Some 15 people are still missing.
The accident has caused as yet uncalculated damage to villages, fauna, flora and water supply along more than 400 kilometres of river, spanning two states and spilling out to the Atlantic Ocean.
Samarco is a 50-50 joint venture between the world's largest mining company by market value, Australia's BHP Billiton, and Brazil's Vale. It operates three dams in the vicinity of Mariana, a historic tourist town. Two dams, Fundao and Santarem, burst in the accident.
Monitoring of the third and largest dam, Germano, was ordered immediately. Cracks have since been identified by emergency agencies using a drone.
Some 15 million people in 635 municipalities are affected by the mud flow and polluted water supply. The mud is also affecting tourism to the historic region - home to the UNESCO World Heritage-listed city of Ouro Preto - and the economy of the state. Environmentalist have said it could take 100 years before the natural environment recovers.
A report on the cause of the tailings release is expected within 30 days. BHP Billiton has rejected suggestions by Brazilian prosecutor Carlos Eduardo Pinto that Samarco knew of the risks as detailed in a 2013 report. The company said those risks related to tailings piles that have not collapsed.
In a call with analysts on Tuesday, BHP Billiton chief executive Andrew Mackenzie said the company intended to ensure Samarco had enough funding to help communities recover.
"What I can say is that we clearly have to provide appropriate funds for Samarco to enact the humanitarian activities and remediation that we think are the right things to do. That is our intention," he said.
"It is clearly our intention to do what is right by reversing, in the right way, some of the environmental consequences of this accident. As I said in my remarks, we will be carrying out a fairly detailed survey to understand what has happened and what will be required to restore the environment to an appropriate level of health."
Samarco was earlier fined R$250million ($92 million) for polluting river waters causing health risks and making urban areas inhabitable among others. According to a statement on Brazil's environmental agency IBAMA's website, Samarco has 20 days to dispute or pay the fine with a 30 per cent discount.
Costs and fines already incurred as a result of the dam burst have exceeded insurance against civil damages, a Vale executive said on a separate conference call on Monday.
Prosecutors announced they would seek the negotiable bond on Friday. As part of the agreement, the company must provide monthly account of the funds used for prevention of further accidents, risk mitigation and compensation for urban and environmental damages.
A number of websites and grassroots campaigns have sprung up to help affected communities in dire need of bottled water, clothing, funds and volunteers.
Update: This story has been updated to reflect the $366 million payment relates to a preliminary deposit bond, not a fine.
With agencies
