BHP Billiton Provides Samarco Update On Breach Of Fundão Tailings Dam And Santarém Water Dam

BHP Billiton provided Sunday an update following the breach of the Fundão tailings dam and Santarém water dam at the Samarco Mineração S.A (Samarco) iron ore operation in Minas Gerais, Brazil which occurred on November 5, 2015. BHP Billiton and Vale each hold a 50 per cent interest in Samarco.

Samarco has advised that, at this stage, there are 13 fatalities and six people who remain unaccounted for. Emergency services continue to search for the six missing people, BHP Billiton said.

According to BHP Billiton, Samarco continues to work with the Government authorities in Brazil to relocate displaced people from temporary accommodation to rented housing. Relocation is expected to be completed in February 2016.

Clean-up work has commenced in the Barra Longa area, focusing on access roads, housing and bridge repairs, BHP Billiton said, adding that monitoring of the remaining dam structures at Samarco continues. Interim work to repair the damage to the dams and to reinforce parts of the structure has commenced. Operations at Samarco remain suspended.

Samarco and local authorities continue to assess and monitor water quality in the Rio Doce river system. Where water supplies have been affected, alternative water supplies are being provided by Samarco, working with local authorities, BHP Billiton said.

Samarco has reported that tests on the sediments carried out by the Brazilian Geological Service (CPRM) from samples taken at four points in the Rio Doce river system over the period November 14 to November 18, 2015 indicate that concentrations of metals obtained at these sites do not significantly differ from the results produced by CPRM in 2010.

Samarco reports that analysis by SGS Geosol, a company specializing in environmental geochemistry, has confirmed that the tailings are composed of materials that are not hazardous to human health, based on the hazard classification of the material under Brazilian standards.

Samarco has advised that the tailings material released as a result of the breach of the Fundão and Santarém dams is considered to be non-reactive and would be geochemically stable when introduced to the river system or ocean. As a result of the high volume of sand and clay tailings material that moved through the river system, a large number of fish died due to reduced oxygen uptake. Assessment of these impacts is ongoing, BHP Billiton said.

BHP Billiton said that the tailings plume has reached the Atlantic Ocean and is dispersing. Samarco has developed a program for monitoring the plume in the ocean and authorities have provided direction on the scope of the required testing under the program.

The Brazilian Federal Government and certain State governments have announced that, on November 30, 2015, they intend to commence legal proceedings against Samarco, Vale and BHP Billiton for clean-up costs and damages. The announcement indicates that the legal action will demand that the companies establish a fund of BRL 20 billion in aggregate (approximately US$5.2 billion at current exchange rates) for environmental recovery and compensation.

BHP Billiton said it has not received formal notice of the action at this stage.

BHP Billiton said it confirms its commitment to supporting Samarco to rebuild the community and restore the environment affected by the breach of the dams. This includes plans, announced by Vale and BHP Billiton on November 27, 2015, to work together with Samarco to establish a voluntary, non-profit fund to support the recovery of the Rio Doce river system.

As announced at the Annual General Meeting of BHP Billiton Limited on November 19, 2015, the Board of BHP Billiton has established a separate sub-committee to assist the Board in overseeing the governance of BHP Billiton’s management and response to the events at Samarco. The members of the sub-committee are John Schubert (as Chairman), Jac Nasser, Lindsay Maxsted and Malcolm Brinded.

In addition, the Chief Executive Officer, Andrew Mackenzie, has asked BHP Billiton’s Forum on Corporate Responsibility to play a role in providing a high-level, strategic overview of the recovery processes and lessons learned for BHP Billiton. For over 15 years, the Forum on Corporate Responsibility has been a key component of BHP Billiton’s stakeholder engagement program, providing insight into current and emerging issues on a range of sustainability topics. The Forum comprises eight highly respected international civil society leaders as well as members of BHP Billiton’s Group Management Committee, BHP Billiton said.