BHP's Brazil mine plans to reopen within a year

Protesting the Samarco mine disaster at the entrance to Vale headquarters in Rio de Janeiro. Mario Tama/Getty Images BHP Billiton's joint venture mine in Brazil, where a tailings dam collapsed in November leaving 19 dead, could be producing iron ore again within 12 months.

Roberto Carvalho, the CEO of the Samarco mine, owned by Brazil's Vale and BHP, expects production to restart by the fourth quarter.

"All our focus is turning to the restart," he told Reuters News at the company's headquarters in Belo Horizonte. "We have talked to our clients, they have given us all the help possible and are awaiting the return of Samarco."

He told Reuters iron ore pellet output would likely be at 19 million tonnes a year, down from about 30 million tonnes before the disaster.

The BHP share price has been under intense pressure since the fatal disaster. Analysts calculate impact from the mud slide will strip about 4% from BHP’s profits.

In its latest half year results, BHP recorded a pretax impairment of $US1.188 billion, or about $US858 million after tax, for its investment in the Samarco iron ore mine.

Samarco, BHP and Vale have struck an agreement with authorities in Brazil on the cleanup, setting the costs around $US2.3 billion, or almost half previous claims, over the next six years.

The 15-year deal is with the Federal Attorney General of Brazil, the States of Espirito Santo and Minas Gerais and other public authorities for the restoration of the environment and communities affected by the Samarco dam failure on November 5, 2015.

Samarco, Vale and BHP Billiton Brasil will establish a foundation to develop environmental and socio-economic programs to remediate and provide compensation for damage caused by the dam failure.

The miners will fund this with about $US1.1 billion (4.4 billion Brazilian reals) from now until 2018. After that, annual contributions for the three years to 2021 will vary between a minimum of $US200 million and a maximum of $US400 million, depending on remediation and compensation projects.

There's more from the Reuters report HERE.

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