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Update Samarco
BHP Billiton Plc
Registration number 3196209
Registered in England and Wales
Share code: BIL
ISIN: GB0000566504
NEWS RELEASE
Release Time IMMEDIATE
Date 28 July 2016
Release Number 18/16
UPDATE: SAMARCO
BHP Billiton announced today that it will recognise a provision in the range of US$1.1
billion to US$1.3 billion, which is approximately equivalent to a 50 per cent share of
the current estimate of Samarco’s funding obligations under the terms of the
Framework Agreement (Agreement) entered into on 2 March 2016. This reflects the
ongoing uncertainty surrounding the nature and timing of a potential restart of
Samarco’s operations. The associated income statement charge will be recognised
as an exceptional item in the June 2016 half-year, together with direct costs of
approximately US$100 million (post tax).
Samarco and its shareholders continue to believe that the Agreement provides an
effective long-term framework to remediate and compensate for the impacts of the
Samarco dam failure. The Foundation provided for under the Agreement has been
established to deliver the socioeconomic and environmental programs outlined in the
Agreement.
BHP Billiton Chief Executive Officer, Andrew Mackenzie said: “The recognition of the
provision demonstrates our support for the long-term recovery of the communities
and environment affected by the Samarco tragedy and the belief we have that the
Agreement is the most appropriate mechanism to do this.”
The BHP Billiton Board of Directors also approved US$134 million to support the
Foundation to allow the continuation of reparatory and compensatory programs. This
amount will be offset against the provision recognised today.
A further short-term facility of up to US$116 million is being made available to
Samarco to carry out remediation and stabilisation work and to support Samarco’s
operations. Funds will be released to Samarco only as required and subject to the
achievement of key milestones.
The short-term facility announced today will preserve the value of BHP Billiton’s
investment while we continue to monitor developments. The safe restart of the
Samarco operations remains an important priority, along with the restructure of
Samarco’s debt.
Note:
Samarco Mineração S.A is jointly owned by BHP Billiton Brasil LTDA and Vale S.A.
Our 50 per cent interest is accounted for as an equity accounted investment.
On 2 March 2016, Samarco Mineração S.A (Samarco), Vale S.A (Vale) and BHP
Billiton Brasil LTDA (BHP Billiton Brasil) entered into an agreement with the Federal
Government of Brazil, the States of Espirito Santo and Minas Gerais and certain
other public authorities (Brazilian Authorities) (Agreement). The Agreement
provides for settlement of claims brought by the Brazilian Authorities on 30 November
2015 seeking the establishment of a fund for clean-up costs and impacts relating to
the Fundão tailings dam failure on 5 November 2015. The Agreement provides for
the restoration of the environment and communities affected by the Samarco dam
failure. On 5 May 2016, the Agreement was ratified by the Federal Court of Appeal in
Brasilia.
On 3 May 2016, the Federal Prosecution Office commenced proceedings against
Samarco, Vale and BHP Billiton Brasil for BRL155 billion for social, environmental
and economic compensation relating to the Samarco dam failure. Also, on 9 June
2016 the Federal Prosecution Office appealed the ratification of the Agreement. On
30 June 2016, the Superior Court of Justice in Brazil, in the case initiated by Brazilian
Authorities, issued an interim order suspending the decision of the Federal Court of
Appeal to ratify the Agreement. On 14 July 2016 BHP Billiton Brasil filed an appeal
against the latter decision before the Superior Court of Justice.
This announcement contains inside information.
Sponsor: UBS South Africa (Pty) Limited
Further information on BHP Billiton can be found at: bhpbilliton.com
Media Relations Investor Relations
Australia and Asia Australia and Asia
Eleanor Colonico Tara Dines
Tel: +61 3 9609 2360 Mobile +61 407 064 748 Tel: +61 3 9609 2222 Mobile: +61 499 249 005
Email: Eleanor.Colonico@bhpbilliton.com Email: Tara.Dines@bhpbilliton.com
Paul Hitchins Andrew Gunn
Tel: +61 3 9609 2592 Mobile +61 419 315 001 Tel: +61 3 9609 3575 Mobile: +61 402 087 354
Email: Paul.Hitchins@bhpbilliton.com Email: Andrew.Gunn@bhpbilliton.com
Fiona Hadley United Kingdom and South Africa
Tel: +61 3 9609 2211 Mobile +61 427 777 908
Email: Fiona.Hadley@bhpbilliton.com Rob Clifford
Tel: +44 20 7802 4131 Mobile: +44 7788 308 844
Amanda Saunders Email: Rob.Clifford@bhpbilliton.com
Tel: +61 3 9609 3985 Mobile +61 417 487 973
Email: Amanda.Saunders@bhpbilliton.com Elisa Morniroli
Tel: +44 20 7802 7611 Mobile: +44 7825 926 646
United Kingdom and South Africa Email: Elisa.Morniroli@bhpbilliton.com
Ruban Yogarajah Americas
Tel: +44 207 802 4033 Mobile +44 7827 082 022
Email: Ruban.Yogarajah@bhpbilliton.com James Wear
Tel: +1 212 310 1421 Mobile: +1 347 882 3011
North America Email: James.Wear@bhpbilliton.com
Bronwyn Wilkinson
Mobile: +1 604 340 8753
Email: Bronwyn.Wilkinson@bhpbilliton.com
BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209
Registered in Australia Registered in England and Wales
Registered Office: Level 18, 171 Collins Street Registered Office: Neathouse Place
Melbourne Victoria 3000 Australia London SW1V 1LH United Kingdom
Tel +61 1300 55 4757 Fax +61 3 9609 3015 Tel +44 20 7802 4000 Fax +44 20 7802 4111
Members of the BHP Billiton Group which is
headquartered in Australia
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