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Samarco's accounts to be blocked for failing to pay compensation for dams' collapse

Xinhua, November 27, 2015 Adjust font size:

A Brazilian judge on Thursday ruled the blockade of all accounts of mining company Samarco as it failed to pay compensation for the damage caused by the collapse of its dams.

Two tailings dams owned by Samarco in southeastern Brazil collapsed in early November, which killed 13 people and caused 10 others missing. More than 600 people were left homeless, as their neighborhoods were swept by waves of mud and mining wastes caused by the collapse of the dams.

Earlier in November, Judge Frederico Goncalves had determined the blockage of 300 million reals (80 million U.S. dollars) to ensure the payment of compensation for families of the victims in the disaster.

However, the judge said, although Samarco had more than 2 billion reals (0.5 billion dollars) in its accounts by the end of 2014, according to its official reports, now only 8 million reals (2.1 million dollars) were found in its accounts, making it impossible to fulfill the court's order.

Judge Goncalves ruled then that all money from the company's financial transactions will be blocked until the 80 million U.S. dollars are collected.

Meanwhile, Samarco, owned by Brazilian multinational firm Vale and the Anglo-Australian BHP Billiton, is facing troubles on other fronts.

On Wednesday, the UN released a report saying that the mud wave formed by its dams' collapse is toxic and represents a threat to humans.

The company denied the report, claiming that the material spilled from the dams "does not present any hazard to human health."

"This material results from the process of the beneficiation of iron ore and consists basically of water, iron oxide particles and silica (or quartz)," the company said.

Samarco also denied the UN accusations that it did not make sufficient efforts to prevent or mitigate the severe damages caused by the dams' collapse, and it did not properly inform locals of potential danger.

"All measures are being taken to provide emergency assistance to the families and communities affected and to mitigate the socioenvironmental consequences of this accident, with total commitment to society," Samarco said. Endi