BHP, Vale to fight reinstated $6 bln claim for Samarco disaster

SYDNEY/RIO DE JANEIRO (Reuters) - BHP Billiton BHP.AX and Vale SA VALE5.SA said on Friday they would appeal a Brazilian court's decision to reinstate a $6 billion public civil claim from Brazilian authorities over last year's Samarco iron ore mine disaster.

The debris of the municipal school of Bento Rodrigues district, which was covered with mud after a dam owned by Vale SA and BHP Billiton Ltd burst, is pictured in Mariana, Brazil, November 10, 2015. REUTERS/Ricardo Moraes

Samarco, along with BHP and 50-50 joint-venture partner Vale, had agreed in March to settle that claim with staggered payments over a 15-year period, with the total amount dictated by the clean-up and repairs.

Brazil’s government expected the cost of the work to reach 20 billion reais ($6.23 billion), though the mining companies expected the total cost to be significantly less.

The deal was ratified in May, but federal prosecutors appealed the decision, describing it as insufficient and little more than a “letter of intent.”

Brazil’s Superior Court responded to the appeal by issuing an interim order suspending its ratification, BHP and Vale said.

That decision reinstates the government’s original 20 billion real civil claim for clean-up costs and damages against Samarco, Vale and BHP. It also has the potential to reenergize a separate $44 billion lawsuit filed by federal prosecutors.

“BHP Billiton Brasil intends to appeal the decision of the Superior Court of Justice,” BHP said in a statement.

Vale said in a separate statement it would demonstrate to the court that the settlement agreed with the government represented the best way to repair and clean up the damage from the disaster.

In the meantime, Samarco will continue to support the long-term recovery of the communities and environment affected by the dam failure, BHP and Vale said.

A burst tailings dam at the mine on Nov. 5 unleashed a mud flow that killed 19 people, left hundreds homeless and polluted a major river. The government called it the country’s worst environmental disaster.

The mine has been closed since. Environmental authorities say it will only be allowed to reopen when it can prove mud is no longer leaking into the surrounding area and that the mine can be run safely.

($1 = 3.2127 Brazilian reais)

Reporting by James Regan, Ian Chua and Stephen Eisenhammer; Editing by Bernadette Baum and Diane Craft