Posted on 19 Jul 2019
Australia’s BHP says it will be backing Samarco for the decommissioning of the tailings dam at the Germano complex due to legislative changes in Brazil. This was confirmed by the miner in its latest operational report monitored by Kallanish. The Brazilian iron ore miner and pellet producer is co-owned by Australia’s BHP and Vale.
“Samarco is currently progressing plans for the accelerated decommissioning of its upstream tailings dams,” BHP says. “The accelerated timing is expected to result in a provision of approximately $260 million by BHP, as Samarco is not currently expected to generate sufficient cash flows to fund the required decommissioning costs.”
The company will disclose the action in its second-half financial results this year and will treat it as an exceptional item.
BHP is currently reviewing its assumptions to determine the group’s outlook over Samarco. This includes an expected increase of total costs resulting from the lifting of a fishing ban, delay in the resettlement of communities impacted by the dam rupture and growth in financial compensations, explains BHP. The miner is not yet in a position to provide an update on the potential financial impacts on BHP of the Samarco accident, the company adds.
