SYDNEY (Reuters) - BHP Billiton BLT.L>> has not received formal notification that its assets in Brazil have been frozen, a company spokesman said Monday, three days after a court ruled to hold the assets as compensation for the Samarco mining disaster.
“We have yet to receive any formal notification,” BHP Billiton’s Paul Hutchins said by telephone from the company’s Melbourne headquarters. “We hope to have an update tomorrow.”
A judge in Brazil’s state of Minais Gerais on Friday froze the Brazilian assets of BHP and domestic miner Vale SA after ruling their Samarco joint venture was unable to pay for damages following a dam collapse last month at Samarco’s iron ore mine in the state. The disaster killed 16 people, left hundreds homeless, and polluted a nearby river.
Vale said on Sunday it would appeal the court decision, labeling the ruling declaring the two mining companies responsible for the disaster as “inappropriate.”
Vale also said it had yet to be officially notified of the decision, which was issued late Friday, but understood the ruling banned it from extracting iron ore. It did not prohibit it from performing other activities such as iron ore concentration, transportation or sales, according to Vale.
Friday’s ruling judged Samarco held insufficient funds to pay for the 20 billion reais ($5.03 billion) sought by the government in damages and that the responsibility must be shared with its owners.
The consequences for BHP, the world’s largest mining company, are likely to be less far-reaching than for Vale, however, as BHP does not have any assets in Brazil other than Samarco, whose operations are already suspended due to the accident.
BHP in May spun off its other main interest in Brazil, involving bauxite, alumina and aluminum production, along with other selected global operations, into a separate company called South 32.
A fifth of the global supply of iron ore pellets prized by steel mills was eliminated after the Samarco disaster.
But even a permanent closure of Samarco mine would be unlikely to boost pellet prices because other miners were able to boost supply, according to analysts.
Reporting by James Regan; Editing by Christian Schmollinger