BHP joint venture files for bankruptcy protection


BHP joint venture files for bankruptcy protection


Published Date: 2021-04-13 | Source: Stephen Gunnion | Author: Stephen Gunnion

BHP joint venture files for bankruptcy protection

Samarco has filed for a judicial reorganisation to keep creditors off its back to it can continue operating.

BHP Group's Samarco Mineração joint venture in Brazil has filed for judicial reorganisation (JR) so it can keep operating in the face of claims from creditors. It filed the JR, a form of bankruptcy protection, after attempts to negotiate a debt restructure with creditors were unsuccessful. The mine is jointly owned with Brazil's Vale, which also supported the filing.

Samarco restarted operations in December, more than five years after a dam at its iron ore mine collapsed, destroying two towns and killing 19 people in Brazil's worst environmental disaster.

Following the November 2015 disaster, BHP said it had provided hundreds of millions of dollars in financial support, including funds to the Renova Foundation to undertake remediation and compensation programs identified under the March 2016 agreement between Samarco, Vale, BHP Brasil and the Brazilian authorities. It has spent about $3 billion on its remediation and compensation programmes. Compensation and financial assistance of about $870 million has been paid to support approximately 320,000 people affected by the Fundão dam failure. In addition, it said more than 10,000 claims had been settled over the seven months to March under the court-mandated "Novel payment" system designed to ensure compensation for claimants who had struggled to prove their damages in the most informal sectors of the economy.

BHP's shares closed 1.7% down at R425.08 yesterday.


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