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BHP chief on way to Brazil to inspect mine disaster

Xinhua, November 9, 2015 Adjust font size:

BHP Billiton's chief is on his way to assess the human, environmental and operational impacts of the deadly dam burst at its Samarco joint operations in Brazil, the company said in a statement on Monday.

Last Thursday, one of Samarco's dams in the three-tiered tailings complex failed, affecting a second downstream dam resulting in the "significant release of mine tailings".

"The third dam in the complex, the Germano dam, is being monitored by Samarco," BHP said on Monday.

Brazilian authorities are reportedly struggling to determine the cause of the tailings dam failure at Samarco Mineracao iron ore mine in Minas Gerais, co-owned by Brazil's Vale where at least one worker died and another 13 employees are missing.

They say at least 15 members of the local community are also unaccounted for from the torrent of mud and mining sludge that flattened a nearby village when the tailings dam burst, which has also reportedly affected other communities downstream.

"BHP Billiton has offered its full support to help the immediate rescue efforts and to assist with the investigation," the company said in a statement on Monday.

BHP chief Andrew Mackenzie is travelling to the site to "understand first-hand the human, environmental and operational impacts of the incident."

Market analysts have told local media the clean-up costs of the reported "largest ever spill of its kind" could top one billion U.S. dollars, of which BHP is liable for half, and closing the mine until 2019.

BHP Billiton and Brazil's Vale each hold a 50 percent stake in the 30.5 million tonne of iron ore pellet per year operation, with BHP's share of production at 14.5 million tonnes, or three percent of underlying earnings before interest and tax.

BHP Billiton says in light of the disaster, the company is now reviewing its 2016 production guidance while its share price has taken a savage beating on the local and U.K markets.

At the close of Australian trade on Monday, BHP shares were down 1.28 Australian dollars, or 5.64 percent to 21.42 Australian dollars, while the London-listed shares fell 5.7 percent on Friday. Endit