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SYDNEY, July 28 (Xinhua) -- Global giant BHP Billiton Ltd on Thursday said its accounts will take up to a 1.3 billion U.S. dollars' hit to help cover the cost of Brazil's fatal Samarco mine disaster.
The three tiered tailings dam at the Samarco project collapsed in November last year, destroying nearby villages and towns, killing 19 people and leaving over a quarter of a million without potable drinking water. Samarco is an equal share joint venture with Brazil's Vale.
While the Samarco project is still subject to a civil suit seeking up to 43 billion U.S. dollars in compensation, BHP said the 1.1 billion U.S. dollar to 1.3 billion U.S. dollar provision is its share of the current funding obligations under an agreement it entered into with local authorities in March.
It will also provide a further 134 million U.S. dollars to help compensate those hit by the dam's spill, while maintaining the agreement is the best way for long-term site and community clean up.
"The recognition of the provision demonstrates our support for the long-term recovery of the communities and environment affected by the Samarco tragedy and the belief we have that the Agreement is the most appropriate mechanism to do this," BHP Billiton chief executive Andrew Mackenzie said in a statement.
The 1.3 billion U.S. dollar provision also reflects the ongoing uncertainty surrounding the nature and timing of a potential restart to Samarco operations. The company is providing a short term loan facility of 116 million U.S. dollars to carry out remediation and stabilization work to support Samarco's operations, with funds only to be released as required.
"The short-term facility announced today will preserve the value of BHP Billiton's investment while we continue to monitor developments," BHP said.
"The safe restart of the Samarco operations remains an important priority, along with the restructure of Samarco's debt."
By mid-morning on Thursday, BHP's shares were up 11 Australian cents (8.26 U.S. cents), or 0.58 percent at 19.98 Australian dollars (15.00 U.S. dollars), in line with gains on the broader market.
