BHP, Vale disaster turned into mining’s Deepwater Horizon

The Guardian reports that federal prosecutors from Minas Gerais where the iron ore mine is located based their damages claim on the clean-up costs associated with the oil spill at Deepwater Horizon, a rig in the Gulf of Mexico owned by BP:

“Preliminary studies show the human, economic and socio-environmental impacts of the collapse of the dam are, at least, equivalent to those verified in the Gulf of Mexico,” they said. “It does not seem credible, neither technically nor morally, that the value of the human, cultural and physical environment in Brazil should be worth less than other countries,” they added in a statement.

British oil giant BP has sof far paid out $54 billion in penalties, environmental reparation costs and compensation to communities affected by the 2010 offshore rig explosion and leak that released the equivalent of 4.9 million barrels of oil that covered an area anywhere from 6,500 to 176,000 square kilometres based on differe

In a statement Melbourne-based BHP, which appears to be taking the lead in public communication concerning Samarco, said it had not received any formal notice of the claim adding that it “remains committed to helping Samarco to rebuild the community and restore the environment affected by the failure of the dam.”

In March Vale and BHP reached a deal with Brazilian authorities and the mine owners agreeing to pay an estimated 24 billion reais or $6.2 billion spread out over several years. Samarco committed to providing $1.1 billion through 2018 into a fund for clean up costs and amounts between $200 million and $400 to 2021.

The disaster in Minas Gerais  caused sludge to flow into the country’s second largest river system, the Rio Doce, into neighbouring Espírito Santo state through remote mountain valleys reaching the Atlantic ocean 600 kilometres away.

Vale SA and BHP Billiton will pick up the tab should Samarco be unable to make payments. The mine which has annual capacity of roughly 30 million tonnes has been closed since the November 5 disaster that killed 19 people and left hundreds homeless. Samarco hopes to re-open the mine before the end of the year.

In January BHP said the tailing waste spill was much smaller than previously determined. The volume of tailings material released when two dams were breached was about 32m cubic metres. Initial estimates were put as high as 60m cubic metres. Samarco also found that approximately 85% of the released tailings were retained within 85 kilometres of the Fundão dam.

Iron ore continued to slide on Wednesday with the benchmark price pegged at $61.00 a tonne, down more than 2% on the day. Iron ore is still up over 40% so far this year.

The mix of reddish mud, water and debris reached the Atlantic Ocean in a matter of days. (Screenshot from PigMine 7, via YouTube)