Brazilian prosecutor: Samarco keeps leakingPublished by MAC on 2016-04-22
Source: Statement, Mining.com, Reuters, Bloomberg, WSJ, DW (2016-04-22)
The company faces at least three class actions in the US.
Experts say Brazil's Rio Doce region will take decades to recover, after the devastating dam burst and mine waste spill that killed at least 17 people in November 2015. Fishermen face an uncertain future, while the potential for further accidents looms.
Mining company Samarco and its owners, BHP Billiton and Vale, reached a deal with the Brazilian government to pay an estimated 20 billion reais ($5.1 billion) in damages over 15 years for the deadly spill.
Meanwhile, six top executives of the BHP Billiton-Vale joint venture and one contractor have been accused of homicide. According to an engineer who worked on the dam, the iron ore miner know of “severe” structural problems before it collapsed, but didn’t fix them.
BHP Billiton and Vale expects to restart production by the start of the fourth quarter to be able to pay for the settlement signed in April.
The restart depends on authorisation from the Minas Gerais state environmental agency, Semad. But a prosecutor said that Samarco has not adopted measures to stop the leaking of mine tailings as required by the court.
The company is also facing at least three class actions from US legal firms, claiming investors unfairly lost out in the Mariana disaster.
As the world’s second-largest producer of iron-ore pellets, Samarco reached an annual output rate of about 30 million metric tons last year.
Previous article on MAC: Brazil: Tailings dams fall-out has international repercussions
Samarco continues polluting after dam burst: Brazil prosecutor
22 April 2016
Samarco Mineração SA has not adopted measures to stop the leaking of mine tailings as required by a court after a deadly dam burst, a prosecutor said on Friday, an allegation that could delay the miner's return to operations.
Prosecutor Carlos Eduardo Ferreira Pinto said in an interview with Reuters he would submit the opinion to court by Tuesday. If a judge agrees, Samarco will have to pay a daily fine of 1 million reais ($277,000) until the leaks stop.
Environmental protection officials have said Samarco would have to stop all leakage before they would grant permission to resume operations that halted after a disaster in November that killed 19 people.
Samarco, which is jointly owned by mining companies Vale SA and BHP Billiton Plc, said on Friday that a 2 million cubic meter capacity dam it built is preventing leaks.
Based on a report prosecutors commissioned from a local technological center, the structure does not stop water from leaking into provisional dikes, picking up tailings sediment from the dam burst, and flowing into the Rio Doce river, Pinto said.
Samarco hopes to resume operations to be able to pay for a 20 billion reais damages settlement.
(Reporting by Marta Nogueira; Writing by Caroline Stauffer)
Samarco dam burst lawsuits mount for BHP Billiton
The Daily Telegraph
11 April 2016
THE legal toll from the deadly Samarco dam burst continues to mount for BHP Billiton, which has been hit with a fresh class action in the US.
The mining titan is also facing at least three other class actions from aggressive US legal firms claiming investors unfairly lost out in the disaster, which killed at least 17 people in Brazil in November.
New York law firm Pomerantz lodged a class action against BHP chairman Jac Nasser and CEO Andrew Mackenzie in the US District Court in Manhattan last month, court documents show.
BHP finance director Peter Beaven and his predecessor Graham Kerr, who now heads spin-off miner South 32, are also named in the lawsuit. The complaint alleges BHP made “materially false and misleading statements and omissions” over its ability to safely manage the Samarco iron ore operation it jointly runs with Brazilian mining major Vale.
Pomerantz specialises in securities and corporate governance and said it champions “the rights of defrauded investors and consumers”.
Its class action mirrors one lodged in February on behalf of a group of investors led by US public pension fund the Jackson County Employees’ Retirement System.
Fellow US legal firms Levi & Korsinsky, Vincent Wong Law Office and Robbins Arroyo are also working to enrol disgruntled US investors in separate class actions.
These actions are likely to be so-called claims farming, where legal firms sign up potential victims before selling them to a law firm that prosecutes a single class action.
BHP told Business Daily it was aware of public statements from US law firms and intended to vigorously defend the complaints.
“We dispute the allegations of these complaints and intend to vigorously defend these matters,” the company said in a statement.
In March, Samarco, 50 per cent owned by BHP, agreed to pay up to $3.2 billion in the first phase of an uncapped 15-year settlement with the Brazilian government to cover rehabilitation costs.
Fellow joint venture partner Vale is facing a class action by US investors.
Brazilian authorities are also considering whether to bring criminal charges against a string of Samarco executives over the disaster.
Brazil wants Samarco to stop leaks before operations resume
7 April 2016
RIO DE JANEIRO – Samarco Mineração will not receive Brazilian government authorisation to resume iron-ore mining operations at the site of a dam burst that killed 19 people until leaks of tailings are stopped, environmental protection officials said on Wednesday.
Samarco, which is jointly owned by mining companies Vale and BHP Billiton, hopes to resume operations at the start of the first quarter to be able to pay for a R20-billion (US$5.53 billion) damages settlement.
The restart depends on authorisation from the Minas Gerais state environmental agency Semad, which told Reuters that the miner needs to find a solution for the leaks from dikes built after the dam burst. Tailings are mineral waste and water sludge left over from mining operations and stored in ponds.
Samarco has taken first steps towards reopening the mine, applying for permission to use old mining pits to store tailings. A permit, however, will only be issued once the leaks are stopped, Semad deputy director Geraldo Abreu said.
Abreu said he expected Samarco to find a solution to the leaks in the six months that it will take to issue a permit.
Federal environmental protection agency Ibama said the leaking was allowing water with above-permitted turbidity levels to flow down to the Rio Doce river.
Ibama coordinator for emergencies, Fernanda Pirillo, said half of the 24-million cubic metres of tailings that remained in the dam after it burst have leaked into the provisional dikes, which are leaking the turbid water into the environment.
Samarco representatives said provisional measures taken by the miner comply with environmental norms and a final solution was being sought.
Samarco Chief Executive Roberto Carvalho said last month that iron-ore pellet production for the initial two to three years would likely be at a reduced 19-million tonnes per year as the company develops a long-term plan to store the mining waste known as tailings. Before the dam disaster, Samarco was producing about 30-million tonnes per year.
Mariana Disaster is a Crime
Frei Roberto Peret
Justice, Peace, Integrity of Creation dan Mining, Ação Franciscana de Ecologia e Solidariedade People’s Dialogue
In November 5, 2015, two tailings dams (Fundão and Santarém) burst at an iron ore mine operated by Samarco Mineração SA, a joint venture between Vale SA (50%) and BHP Billiton Brasil Ltda (50%), in Mariana, state of Minas Gerais, Brazil.
Seventeen people are dead and 2 still missing in a “tsunami of mud”. 62 million cubic meters of water and mining waste went down a mountainside. The dams contained tailings, a mining waste product of metal filings, water and chemicals. This toxic mud buried Bento Gonçalves village and oozed into one of Brazil’s most important rivers, the Doce River. It destroyed the aquatic life of this river basin. The contaminated river waters went downstream 498 miles and reached the Atlantic, killing thousands of fish and turtles in the process. The tides endangered a system of islands and reefs that are used by sea turtles and dolphins to breed.
On its way, the mud made undrinkable the water of millions of people, in 23 cities.
The U.N.’s Office of the High Commissioner for Human Rights said the residue “contained high levels of toxic heavy metals and other toxic chemicals,” like arsenic and mercury, making the damages most likely irreversible, as the toxic sludge continues to permeate both land and water.
On the afternoon of January 27, 2016, a new leak of tailings occurs in the same dam, in Mariana, further threatening the communities already deeply affected by environmental crime in question. This time, the volume of displaced waste reaches 1 million cubic meters. This new event shows that the break has not ceased and there is considerable remaining, approximately 20 million cubic meters within the Fundão Dam.
What broke the dams in Mariana, Brazil?
It was an avoidable catastrophe. Earn short-term profits, no matter what cost, added by a series of negligence, bureaucracies, and disrespect for human rights and the environment, are the root causes of these disaster. It shows the logic that runs the implementation of large projects impacting territories, in Brazil.
Profit Above All
In October 2015, the average price of iron ore exported by Brazil closed at $59.5 per ton, the lowest level since March 2010.
Market movements, running from high and low commodity prices cycles, end up prevailing over the safety of people and nature. Often there is an increased extraction rate to maintain the profitability of the enterprises, which have expanded in the high prices time. During the low prices time there is a huge pressure to maintain profitability. Thus, it increases the rate of ore extraction.
According to Samarco’s "Annual Sustainability Report 2014”:
a) In 2009, Samarco has produced 16 million tons of iron pellets. In 2014, the production was 25 million tons. Representing a 56% increase in just five years, of which only 19% between 2013 and 2014. The increase in production, consequently, led to a large increase in the volume of waste.
b) In 2009, the production of waste hit the 13.7 million metric tons. In 2014, reached a record 21.9 million tons (growth of 60%, of which only 33% between 2013 and 2014).
Samarco in fact increased the waste deposition rate in recent years at that dam complex.
The dam structure had reached its ceiling, from which should be deactivated, according to the licensing commitments made by Vale and BHP (Samarco) in 2008, when the installation license was granted. Vale and BHP Billiton (Samarco) increased its extraction of iron ore production capacity at its plant. The increase in production also grew the volume of waste deposited in the broken dam. Each ton of ore processed generates almost equal volume of waste.
Samarco’s Annual Sustainability Report 2014, published at the company’s website, made no mention of increasing the capacity of these reservoirs, or reinforcement of these dams.
The amount is higher than officially declared. Vale was pouring tailings [from] another mine without authorization, the tailings dam that broke. The waste, he says illegally dumped, was responsible for almost 30% of the dam volume.
Negligence, Bureaucracies, and Disrespect
Increasing extraction of minerals also implies the generation of more waste and therefore the need for increased the capacity of the dams, a factor that is not respected by the companies, postponing until the last consequences to regularize this situation. To ensure the continuity of the work of these enterprises are used subterfuges in the licensing process, the key to any irregularities in this field.
A technical report produced by the environmental institute Instituto Prístino and commissioned in advance of the state’s 2013 decision to allow Samarco to increase the dam’s height raised concerns over its safety and recommended monitoring, a contingency plan and a “dam break analysis”. At that time the Minas Gerais State Environment Prosecutor’s Office, warned the state Department of Environment (SUPRAM) and Samarco (Vale – BHP Billinton) to the risk of rupture of the dam Fundão and Santarem: "The contact between the pile and tailings dam is not recommended because of the risk of destabilization of the pile mass and enhancement of erosion".
This documentation was published at the Regional Superintendence for Environmental Regularization (SUPRAM) website.
On December 04, 2015, almost one month after the dams break, National Department of Mineral Production released a document stating that Vale has placed a greater amount of ore tailings in the Samarco dam that broke. The amount is bigger than what was officially declared. Another Vale mine was responsible for almost 30% of the ore tailings dam that broke. Thus, in the context of accountabilities, Samarco and Vale should be seen in the same group responsible for what happened, denying thus the role of mere shareholder Samarco, like Vale company publicly use to declare.
The Brazilian License System
In market economies there's no way to talk about investments without a close and direct relationship between political power and the private sector. In Brazil, in addition to state regulation, in terms of authorizations and licenses, the direct and indirect financing is an important factor, and almost indispensable to the viability of many projects. The private sector also depends on the state for planning. In this interaction the state is co-opted and capitalism is released.
In Brazil, the environmental licensing, corresponds to the administrative procedure whereby the competent environmental agency licenses the location, installation, expansion and operation of projects or activities that use environmental resources considered as being actually or potentially polluting or those who, in any form, cause environmental damage considering the laws and regulations and technical standards applicable to the case. The environmental licensing process, analyzes the environmental feasibility for the establishment of projects and business potentially polluting in a given locality, to ensure that the environmental impacts and risks arising from its implementation are known, disseminated, discussed, monitored, evaluated, avoided, mitigated and compensated. However, licensing has become a process, in which the entrepreneur fulfills a mere bureaucratic procedure. However, the license has become a mere bureaucratic procedure, performed with failures and shortcomings.
As mentioned above, Samarco (Valley - BHP Billiton) actually had increased the waste deposition rate in recent years, due to the expansion of production capacity. It became urgent to increase the capacity of the tailings dams, and the construction of a new structure for this purpose. This would require new licenses. However, a common subterfuge used by entrepreneurs is to fragment the licensing process. To postpone the licensing of a new dam, and propose the licensing of the increasing in production capacity, based on the argument that it is possible to make changes to the dams already in operation.
It seeks to license the increase in production capacity based on the argument that it is possible to change the dams already in operation, delaying the licensing of a new structure. This leads to overload[ing] the use of these dams. [For this they] would need new licenses.
Another problem in the licensing process is the direct relationship between the entrepreneurs, the most interested in the project and the consulting firm that will do the analysis. This is due to the fact that companies directly hire the consultants who will prepare environmental impact studies. Added to this picture the little or no participation of the local population, which is who actually knows the characteristics of that region. The licensing system is extremely limited for the participation of the population. When there are public hearings, these are purely formal acts, simply informative, with no decision-making character. The manifestations, questions and demands of the population have not effectively influenced on the license; a maximum of claims generate formal responses.
The mud flood reached the Gualaxo River - Carmo River tributary, which flows into the Doce River, which, in turn, goes towards the Atlantic Ocean, in the Espírito Santo state. The more perceptive impact on the aquatic environment was the death of thousands of fishes that perished as a result of lack of oxygen in the water and clogging their gills. In addition to the death of fish, microorganisms and other living things were also affected, which completely destroyed the food chain in some affected environments. Many biologists estimate that Doce River needs, on average, 10 years to recover from the impact.
Other than the death of living organisms that affect the rivers of the region, the amount of released mud can cause siltation, diversion of watercourses and even bury springs. Some rivers may also become shallower due to the deposition of mud.
In addition to the death within the rivers, the mud has killed all the vegetation close to the region. A large amount of riparian vegetation was completely destroyed. The mining waste are affecting the soil, causing chemical breakdown and affecting the pH of the soil. This change in soil hinders the development of species living there, completely modifying the local vegetation.
A document from NATIONAL ASSOCIATION FOR RESEARCH AND GRADUATE IN GEOGRAPHY, published on December 21, 2015, to address the impacts in the basin of Doce River, states:
“The break of the dams destroyed ecosystems involved in the river, in their margins, buried by the toxic sludge that resulted in its path pesticides, poisons and sewage accelerating and expanding the process of destruction. Were killed fish, insects, amphibians, molluscs, larvae, phytoplankton, breaking the link in the food chain. Fishermen had their base of support, extinct for a long time. Aquatic plants were affected, they were breeding niche of the ichthyofauna and trees that were for the birds make their nests were decimated. In addition to these negative impacts there is the possibility of change in the river thalveg profile, with the accumulation of sediments and therefore with the drowning of the mouth of its tributaries. These changes dramatically affect reproduction and migration of fish.”
"The situation is catastrophic, but the future in many ways is unpredictable Tons of mud laden with heavy metals and contaminants are deposited on the banks of the Rio Doce and its thalweg (bottom of the bed), from Mariana to its mouth and certainly in the coastal edge. Such waste is solidified and burying life. There is a possibility of existence chemicals, mercury composed, iron, arsenic, chromium and other chemicals. After the disaster, the Autonomous Water Service (SAAE) of the municipality of Baixo Guandu informed that the analysis of materials listed in the Doce indicated the presence of heavy metals as aluminum, iron, barium, lead, copper, mercury and boron. Such discharges of toxic substances flout current legislation and entail liability of managers who promoted these releases. During periods of heavy rainfall runoff concentrated in the form of floods and river floods wallow deposited materials, causing new levels of mortality.”
The toxic mud reached the water supply of many cities, contaminating the water available to the public; millions of people were sacrificed without having drinking water with minimal quality.
Samarco's toxic mud continues to leak out, and its cleanup efforts are inadequate.
A police investigation was opened two days after the dam break and 80 people have been heard so far, according to the Civil Police of the State of Minas Mines. The civil police is investigating the deaths, environmental crimes, damage to private and public property and other crimes.
Parallel to the civil police investigation runs another investigation by the Federal Police, which has indicted Samarco's leaders and Vale – BHP Billiton for environmental crimes.
By decision of a judge from the Court of Justice of Minas Gerais (Minas Gerais Appeal Court), the dossiers for Mariana disaster will be sent to the Federal Court. The Public Prosecutor's Office of the State of Minas Gerais (MP-MG) believes that the decision will bring serious harm to people affected by the breakup of the dams.
The Brazilian government initially fined Samarco the equivalent of $265 million, but later increased that amount to $5 billion. The Brazilian courts then froze its domestically held assets after the Brazilian government decided to sue Samarco, and its owners Vale SA and BHP Billiton for $7.1 billion.
The legal battle is still being played out in the courts
- No one arrested!
- 17 dead
- 2 still missing
- 11,000 fishermen and small farmers unable to work
- 3.2 million people affected
- 498 miles of contamination and the death of Doce River.
- No person compensated
People’s Dialogue Rodrigo Peret ofm email@example.com
Brazilian prosecutors question Samarco dam burst settlement
3 March 2016
BRASILIA - Brazilian prosecutors on Thursday criticized a deal that mining company Samarco reached earlier this week with the federal government to pay an estimated 20 billion reais ($5.27 billion)in damages for a deadly dam spill in November.
The settlement favors the miner instead of the population affected by what is considered to be Brazil's worst environmental disaster, the prosecutors of the task force investigating the spill as well prosecutors in the states of Minas Gerais and Espirito Santo said in a statement.
Samarco and its owners, BHP Billiton and Vale SA VALE5.SA, inked a settlement deal with the government on Wednesday after weeks of arduous negotiations. The miner agreed to pay an estimated 20 billion reais in damages over 15 years to compensate local communities flooded by a tsunami of mining waste that also polluted a major river in both states.
The burst tailings dam killed 19 people and left hundreds homeless.
Prosecutors said the deal does not guarantee the proper clean up and payment of damages for populations that were not included in settlement talks.
The deal does not block other judicial actions currently ongoing in both states, prosecutors said.
(Reporting by Alonso Soto; Editing by Sandra Maler)
BHP, Vale to reopen Samarco mine later this year
12 March 2016
Iron ore miner Samarco, a joint venture between BHP Billiton and Vale, expects to restart production by the start of the fourth quarter, less than a year after a burst tailings dam killed 19 people in Brazil.
CEO Roberto Carvalho told Reuters on Thursday that iron ore pellet production for the initial two to three years would likely be at a reduced 19 million tonnes annually, as the firm develops a new and long-term solution to storing the mining waste known as tailings.
Last month, Brazilian police charged six of Samarco’s top executives and one contractor with "qualified homicide,” the equivalent to involuntary manslaughter, over the deaths of those killed as a consequence of the dam burst.
"Samarco has already taken the first steps towards reopening the mine, applying for permission to use old mining pits to store tailings."
In Brazil only prosecutors, and not police, can legally bring criminal charges, but accusations from officials often precede formal charges.
Local police have also accused the seven individuals of endangering public health by polluting the region’s drinking water. They warned they would carry out a further criminal investigation over the next month related to the environmental impact of the mining disaster.
Samarco, through a settlement with Brazil’s authorities reached in early March, has agreed to pay an estimated 20 billion reais or $5.1 billion, spread out over several years.
The miner will allocate $1.1 billion through 2018 for clean up costs and amounts between $200 million and $400 to 2021.
According to Reuters, the miner has already taken the first steps towards reopening the mine, applying for permission to use old mining pits to store tailings. However, it is still waiting for the results of the investigation into the cause of the dam burst, which may force Samarco to change plans.
Rio de Janeiro-based Vale is the world's number one producer of the steelmaking raw material and BHP comes in at number three behind fellow Australian miner Rio Tinto.
Samarco’s bonds that lost 60% after disaster are now best bet
Convincing bond holders the worst is over.
Filipe Pacheco and Paula Sambo
10 March 2016
Samarco Mineracao SA, the miner responsible for Brazil’s biggest environmental disaster, is convincing bondholders that the worst is over for the company.
The iron-ore venture owned by Vale SA and BHP Billiton Ltd. has seen its $1 billion of bonds due in 2022 surge 48 percent since Jan. 22, when local newspapers reported the company was in settlement talks with the government. In an accord announced March 2, Samarco agreed to pay at least $1.1 billion over the next three years for damages that resulted when two dams burst at the company’s mine in the state of Minas Gerais in November, killing at least 17 people and unleashing billions of gallons of sludge into the Rio Doce river.
The settlement has fueled speculation that Samarco will be able to regain its mining license and resume operations at the mine after it completes the clean-up, according to Stone Harbor Investment Partners and Mizuho Securities USA. Samarco saw its bonds plunge into distressed levels last year after they lost 60 percent of their value and Moody’s Investors Service slashed the company’s rating to seven levels below investment grade. Samarco was rated above junk before the mining accident.
“The signing of the agreement between Samarco and the Brazilian government is an important first step in allowing the company to return to operational normalcy,” said Darin Batchman, who helps manage $39 billion, including Samarco debt, at Stone Harbor Investment Partners.
Samarco has agreed to pay 2 billion reais ($534 million) this year, 1.2 billion reais in 2017 and another 1.2 billion in 2018, Vale and BHP said in separate statements last week. Annual payments for 2019, 2020 and 2021 will vary between 800 million reais and 1.6 billion reais depending on project needs. Over 15 years, the arrangement may require 20 billion reais to guarantee social, economic and environmental projects, according to a statement released at a signing ceremony between the parties in Brasilia on March 2.
The agreement is “clearly positive for Samarco,” said John Haugh, a Latin America strategist at Mizuho Securities USA in New York. “It’s in the Brazilian government’s best interest to allow Samarcoto maintain its mining license and restart its operations for a number of reasons — particularly as a way to finance the settlement, rebuilding and environmental clean-up costs.”
Samarco, which was the world’s second-largest producer of iron-ore pellets, had an annualized output rate of about 30 million metric tons in September. The company aims to regain the environmental license it lost after the disaster to resume operations this year, according to a March 3 report published by news website G1, which cited CEO Roberto Carvalho.
The mining company could generate $900 million in earnings before interest, taxes, depreciation and amortization at full capacity, Itau BBA said in a report on March 3. Brazil’s real climbed 1.2 percent Wednesday to 3.7110 per dollar as of 1:11 p.m. in New York.
“Now it is possible to do the math and project the costs against the earnings coming out of Samarco and be able to judge if there will be a probable bond restructuring,” said Patrik Kauffmann, a money manager at Solitaire Aquila Ltd., which oversees $11 billion in Zurich. “If BHP and Vale inject some capital into the company or give it a credit line, Samarco will be able to make the payments without a restructuring.”
BHP, Vale shares surge on Samarco deal
2 March 2016
A deal on a compensation package for the deadly Samarco tailings dam spill was reached on Wednesday 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.
According to a Reuters report joint owners 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.
American Depository Receipts of BHP Billiton trading in New York built on 8.1% gains during regular dealings in after hours trading on Wednesday, while Vale ADRs shot up 9.4%.
Rio de Janeiro-based Vale is the world's number one producer of the steelmaking raw material and BHP comes in at number three behind fellow Australian miner Rio Tinto. BHP and Vale made steady gains as details of the deal leaked out over the past few days and the iron ore price moves back above the $50 a tonne level.
Samarco to pay $5 bln in damages for dam disaster
(Brazil government corrects estimate to 20 bln reais ($5.1 billion) from 24 bln reais)
Anthony Boadle and Stephen Eisenhammer
2 March 2016
Mining company Samarco and its owners, BHP Billiton and Vale SA , reached a deal with the Brazilian government on Wednesday to pay an estimated 20 billion reais ($5.1 billion) in damages over 15 years for a deadly dam spill in November.
Considered Brazil's worst environmental disaster, the burst tailings dam in the state of Minas Gerais killed 19 people, left hundreds homeless and polluted a major river.
Of the total, Samarco will pay 4.4 billion reais through 2018 into a fund to cover the cleanup of the spill from the tailings dam. From 2019 to 2021, payments will be between 800 million reais and 1.6 billion reais.
"We want to build new life on the rubble of an unprecedented tragedy," President Dilma Rousseff said at the signing ceremony in Brasilia.
Beyond 2021, the amount will be decided depending on how much work remains to be done. The government estimates the total cost of the lengthy environmental plan, including replanting and dredging, will reach about 20 billion reais.
The 20 billion reais figure was, however, noticeably absent from statements sent by Samarco, BHP and Vale. The obligations outlined by the companies instead came to about 12 billion reais. The difference, the government explained, was due to estimates of amounts that can be only decided in the future.
"This is not about a dollar amount, this about a program to remediate, to restore and where we can't restore to compensate and also to leave some positive legacies behind," Dean Dalla Valle, BHP's Chief Commercial Officer, told Reuters at the ceremony.
"Besides straight remediation, we are talking about actions like sewage, landfill, reforestation, water treatment," he said.
Vale, in a statement, said that in the event Samarco is unable to pay its obligations, Vale and BHP would be responsible for covering the costs.
The miner said the accord does not cover private civil suits, other public civil suits or criminal investigations.
Preferred shares in Vale were trading 7.5 percent higher following the announcement, boosted on the accord and a rise in iron ore prices.
Dalla Valle said he hoped Samarco would be in a position to restart its mine in the final quarter of the year. The company has already taken the first steps to get its licenses in place to restart.
"We will only start when it is absolutely safe, we will need to learn from the investigation. The way it will start won't involve the current tailings dams," Dalla Valle said.
($1 = 3.89 Brazilian reais) (Reporting by Anthony Boadle; Writing by Stephen Eisenhammer and Daniel Flynn; Editing by Bill Trott and Grant McCool)
Shareholder Update: Samarco
BHP Billiton statement
3 March 2016
Samarco Mineracao S.A (Samarco) and its two shareholders, Vale S.A (Vale) and BHP Billiton Brasil LTDA (BHPB Brasil), have entered into an agreement with the Federal Attorney General of Brazil, the States of Espirito Santo and Minas Gerais and certain other public authorities (Brazilian Authorities) for the restoration of the environment and communities affected by the Samarco dam failure on 5 November 2015.
The Agreement provides a long-term remedial and compensation framework for responding to the impact of the Samarco tragedy.
Samarco, Vale and BHP Billiton Brasil will establish a Foundation that will develop and execute environmental and socio-economic programs to remediate and provide compensation for damage caused by the Samarco dam failure.
There are two broad types of programs included in the Agreement:
· Reparatory Programs to restore the environment, local communities and the social condition of the affected areas; and
· Compensatory Programs to provide compensation where remediation is not possible, and to provide compensation on a goodwill basis for certain special projects which go beyond strict make-good and compensation (for example, improvements to sewage systems and landfill management in the river basin).
The Foundation will be governed by a seven member Board, with Samarco, BHP Billiton Brasil, and Vale each appointing two members and the Brazilian Authorities appointing one member. The Foundation will be assisted in its work by an advisory panel that will include technical experts, regulators and community representatives.
The Foundation will submit remediation and compensation programs for approval to a Council consisting of representatives of the Brazilian Authorities. The Foundation’s activities will be subject to independent external audit.
The term of the Agreement is 15 years, renewable for periods of one year successively until all obligations under the Agreement have been performed.
Samarco will fund the Foundation with contributions as follows (calendar years):
· BRL2 billion (approximately US$500 million) in 2016, less the amount of funds already spent on, or allocated to, remediation and compensation activity 1,
· BRL1.2 billion (approximately US$300 million) in 2017, and
· BRL1.2 billion (approximately US$300 million) in 2018.
The amount of annual contributions for each of the years 2019, 2020 and 2021 will vary between a minimum of BRL800 million (approximately US$200 million) and a maximum of BRL1.6 billion (approximately US$400 million), depending on the remediation and compensation projects which are to be undertaken in the particular year.
To the extent Samarco does not meet its funding obligations, each of Vale and BHP Billiton Brasil is liable in proportion to its 50 per cent shareholding in Samarco.
Samarco will continue to conduct and fund the humanitarian and environmental recovery and remediation work until the Foundation is operational, which is likely to be in the next few months.
The Agreement is subject to Court approval. If approved, the Agreement will settle the civil public claim commenced on 30 November 2015 by the Brazilian Authorities against Samarco, Vale and BHP Billiton Brasil which sought the establishment of a fund of up to BRL20 billion in aggregate for clean-up costs and damages relating to the dam failure.
BHP Billiton Chief Executive Officer, Andrew Mackenzie said: “This Agreement is an important step forward in supporting the long-term recovery of the communities and environment affected by the Samarco dam failure. It provides a platform for the parties to work together to support the remediation of affected areas.
“This agreement demonstrates our commitment to repairing the damage caused and to contributing to a lasting improvement in the Rio Doce.”
1 For example amounts already paid by Samarco, or held in Court or frozen accounts.
Moody's BHP Billiton downgrade
3 March 2016
Moody's have downgraded BHP Billiton debt rating, saying the prolonged commodity price rout will continue to eat into the miner's balance sheet. The credit rating agency cut BHP's long-term debt rating by two notches to A3, citing the impact of metal prices on its earnings and cash flow.
BHP today said that it will pay at least $1.1bn in compensation with Vale for the Samara mine disaster last year, following an agreement with the Brazilian authorities.
Moody's is reviewing mining companies' ratings on the belief that the sector's downturn is worse than previously thought. It's also warned a recovery is likely to take longer than initially expected. "Supply imbalances, particularly in iron ore and petroleum products -- which are the major earnings and cash flow drivers for BHP Billiton -- will maintain their downward pressure on prices for several years.," it said.
"In addition, the strong US dollar is a further factor contributing to the weakening in demand and the downward pressure on prices since most metals are traded in dollars."
"While lower freight costs and depreciation of the Australian dollar have helped reduce BHP's input costs, the drop in commodity prices has and will continue to significantly impact the company's performance."
Brazil police seek arrests of Samarco executives over spill
Samarco says detentions are misguided.
24 February 2016
Brazilian police are seeking a court order to arrest six Samarco Mineracao executives for alleged negligence in a tailings dam spill that killed at least 17 people in November.
Minas Gerais state police released the findings of an initial inquiry in an e-mailed statement on Tuesday. Also under investigation is an engineering contractor.
Samarco, a joint venture owned by Vale SA and BHP Billiton, said in an e-mailed response that the proposed detentions are misguided and that it will wait for the court’s decision before taking action. Samarco is undertaking its own investigation of the collapse and is collaborating with authorities, it said.
In a separate statement, BHP and Vale said they are studying comments made by police in Brazil. “These are serious allegations that need to be fully considered,” the companies said on Wednesday in a joint statement. “We will study the statement of the Civil Police closely.”
The companies won’t speculate on the cause of the dam failure as an independent external panel is continuing an investigation, they said.
The tailings dam burst on November 5, unleashing a wave of sludge that devastated communities along the Rio Doce River. Among the police allegations are negligence in monitoring the dam’s operations and a flawed emergency plan.
Samarco executives accused of homicide by Brazilian police over dam burst
24 February 2016
Six top executives of iron ore miner Samarco, a joint venture between BHP Billiton (ASX:BHP) and Vale (NYSE:VALE), and one contractor have been accused of homicide over the deaths of 19 people who were killed in a dam burst last November.
Brazilian police in the state of Minas Gerais recommended "qualified homicide" charges for the chief executive of Samarco at the time, Ricardo Vescovi, and six others, local newspaper Veja reported (in Portuguese).
In Brazil only prosecutors, and not police, can legally bring criminal charges, but accusations from officials often precede formal charges.
People charged with "qualified homicide” — the Brazilian equivalent of involuntary manslaughter — face between 12 to 30 years in prison.
"The seven executives, including Samarco's boss at the time of the mine disaster, are being accused of "qualified homicide"."
Police have also accused the seven individuals of endangering public health by polluting the region’s drinking water. They warned they would carry out a further criminal investigation over the next month related to the environmental impact of the mining disaster.
According to Brazilian authorities, the accident was caused by a lack of proper monitoring. This caused the reservoir behind the dam to overfill. They have also said that faulty equipment and a failure in the drainage system played a role.
In an e-mailed joint statement, BHP and Vale said the allegations were “serious” and that they needed to be “fully considered.”
The mining giants also said they were awaiting the findings of an independent external investigation, and “until it is completed, we will not speculate about the cause, or causes, or talk about what may or may not have contributed to the failure of the dam”.
The companies are in negotiations with the Brazilian government to reach a settlement, likely to be around $5 billion.
The deadly dam burst is considered the country’s worst environmental disaster, polluting a major river with thick red sludge, which quickly reached the Atlantic Ocean.
Brazilian court blocks assets of Vale and BHP worth $120 million
12 February 2016
A judge in Brazil's state of Minas Gerais has frozen close to $120 million worth of assets belonging to mining giants BHP Billiton and Vale to cover "material and moral damages, individual and collective" caused by the bursting of a dam at their jointly owned mine in November.
Friday's ruling affects mainly the Vale-BHP joint venture Samarco, which operated the iron ore mine where the dam breach occurred, Noticias de Mineracao reports.
Samarco told the Brazilian publication it had not been officially notified yet of the decision, which essentially means it can’t sell or transfer mining rights.
The dam burst, which turned into Brazil's worst ever environmental disaster, killed 16 people, left hundreds homeless and polluted a river 800 km (500-miles) long that flows across two states.
Despite the scale of the disaster, Vale argued Samarco, as an independent legal entity and a sizable company in its own right, was wholly responsible for the accident and the subsequent damage and fines.
There has been growing frustration over delays in providing compensation or repairing damage to those affected by the disaster. A similar ruling in December assigned “environmental responsibility" to BHP Billiton and Vale as "indirect polluters" because they were controlling partners of Samarco. That decision did not specify the value of assets that had been blocked, but media speculated at the time the amount was likely to be over half of the $5 billion sought in damages by the federal government and the states of Minas Gerais and Espirito Santo.
Clearer picture emerging over Brazil's mining disaster
27 January 2016
Experts say Brazil's Rio Doce region will take decades to recover, after 2015's devastating mine waste spill. Fishermen face an uncertain future, while the potential for further accidents looms.
The only way to reach Bento Rodrigues, a small town in the Mariana district of Brazil's mineral-rich state of Minas Gerais, is via a bumpy dirt road.
On approach, the muddy remains of the town that was destroyed when the nearby Fundao tailings dam burst come into view. A blue car, seemingly untouched, balances in the middle of the mess of mud, broken homes and twisted metal.
What is widely considered Brazil's worst environmental disaster occurred November 5, 2015, when a tailings dam in the Mariana district burst, unleashing millions of tons of toxic mud.
The dam breach killed 17 people, left hundreds homeless and polluted the Rio Doce, the region's most important river. Innumerable fish were killed and the river ecosystem devastated before the toxic tailings spilled into the Atlantic Ocean.
Two months later, the companies responsible for the dam face billions in fines. Analysts have blamed the incident on poor practices by Samarco, the company in charge of the dam - along with insufficient regulatory enforcement in Brazil's mining sector.
It will take decades for the ecosystem of the river to recover - if it ever does. Meanwhile, the lives of people whose lives were destroyed by the disaster hang in the balance.
Wiped off the map
Wallison Henrique de Souza, a 28-year-old bricklayer, was at home in Bento Rodrigues when a friend arrived at his house panicking, shouting that the nearby tailings dam - used to store residue from iron ore exploration - had burst.
Wallison ran to safety in the surrounding hills, before taking shelter in another municipality nearby.
"We had no plan of where to go," he said.
Shortly thereafter, millions of tons of toxic mining waste engulfed the town, wiping it off the map. Altogether, 17 people were killed. Wallison and some 600 others lost their homes and possessions.
From Bento Rodrigues, the first town affected, the toxic mud traveled across two Brazilian states via the Doce River before spilling into Atlantic Ocean. The Mariana mining disaster, as it came to be known, is widely considered Brazil's worst-ever environmental disaster.
In court over costs
The tailings dam was owned and operated by Samarco, a joint venture between Brazil's mining giant Vale and Anglo-Australian BHP Billiton.
At the United Nations climate conference in Paris in December 2015, Brazilian President Dilma Rouseff described the event as "the worst environmental disaster Brazil has ever seen," and blamed the disaster on the "irresponsible action of the company."
The Brazilian government initially fined Samarco the equivalent of $265 million, but later increased that amount to $5 billion.
The government has frozen the domestically held assets of Vale and BHP Billiton until the companies pay the fine. Prosecutors are now going to court to try and charge Samarco $1 million per day after the company failed to launch an emergency cleanup program.
The government also wants the company to pick up the tab for temporary housing for displaced residents, like Wallison Henrique de Souza, whose homes were destroyed.
Local residents argue that doesn't go nearly far enough to repair the damage caused by the flood of toxic mining waste.
In Barra Longa, a small town two hours' drive from the burst dam, affected residents say the response by Samarco and local government was slow and ineffective.
Francisco Marcelino, a retired driver whose house was flooded by six feet of mud laced with arsenic and other toxins, said that the first external help to arrive consisted of church volunteers from across the nation. The Samarco workers didn't show up until nearly a week later, he said.
"It was the worst thing I had ever seen," he said, shedding a tear in describing how the mud wave swept away the chickens he kept.
To date, the cause of the dam burst remains undetermined. An official investigation is underway.
Experts say the company clearly failed to avert the disaster and to minimize subsequent damages.
In a report commissioned by the United Nations Working Group on Business and Human Rights, analysts noted that affected residents did not receive official warnings about the burst - despite a 10-hour window between the accident and when the toxic mud hit the first town. They say timely action could have saved lives and possessions.
The full extent of the environmental damage remains unknown. Experts estimate that the region could take 10 to 50 years to recover - if it ever does. A full environmental assessment by independent contractors has yet to be made.
The spill has polluted the 800-kilometer-long Rio Doce - the region's most important river - killing fish, destroying ecosystems and polluting drinking water supplies.
Vale and BHP Billiton have claimed that restoration of the Rio Doce is among their top priorities.
Thousands of fishermen who directly depend on the river for their livelihoods, along with several fishing unions, have launched lawsuits against Samarco.
Speaking from his boat on the now-orange River Doce in Periquito - a six-hour drive from the main spill - fisherman Moises Gomes said that he is concerned for the future.
"We hope for the people who live from fishing, that the companies will set up a mechanism for us to feed our families tomorrow," he said, picking a floating dead fish out of the river, pulling it apart and exposing its mud-filled insides.
Risk for further accidents
In the last 20 years, at least four similar, albeit smaller-scale, mining incidents have occurred in the Minas Gerais region.
There are more than 750 dams just in the Minas Gerais region, 40 of which are considered at risk.
Dante Pesce, a member of the UN business and human rights commission, says that regulation in Brazil's mining sector is adequate more in theory than in practice, and that enforcement is lacking.
He says that when it comes to big projects, economic value trumps social and environmental concerns, and that fines for bad practices are relatively light.
"Even if the evidence is clear to condemn corporate practices, the fines are very low - and therefore, there is an incentive to take more risks on board than you should," he said.
Back in Bento Rodrigues, Wallison Henrique de Souza and scores of others are searching through what's left of the town, trying to find some remnants of their lives. Speaking from the muddy remains of his old hometown, de Souza said that he felt empty.
"My whole life is here - 28 years, buried under this mud," the man said.
Brazil police may accuse Samarco execs of homicide in dam burst: Folha
5 February 2016
SAO PAULO - Brazilian police have enough evidence to accuse executives of miner Samarco Mineração SA with homicide over a deadly dam burst in November, a police chief told newspaper Folha de Sao Paulo on Friday.
Police earlier raided the offices of Samarco, a joint venture of Vale SA and BHP Billiton, in Belo Horizonte, the capital of Minas Gerais state, and in Mariana, where the iron pellets venture is located.
"We have all the autopsy reports. ... The crime of homicide occurred, we will decide if it was voluntary or involuntary," police chief Rodrigo Bustamente said, according to Folha.
Bustamente could not be reached immediately for comment.
Samarco did not respond immediately to a request for comment on the possibility of homicide charges. Earlier, in a statement in which Samarco reported the raid on its offices, the company said in it had collaborated with police since investigations began into the cause of the tragedy that left at least 17 dead and 800 homeless.
Mud surging from the dam devastated an entire neighborhood in Mariana and contaminated a river that supplies fresh water to a large area in Minas Gerais and the neighboring state of Esprit Santo. The tragedy is considered Brazil's worst-ever environmental disaster.
State civil police could not be reached for comment on the potential homicide accusations. Only prosecutors can formally present criminal charges in Brazil.
The report of the police raid of the Samarco offices occurred a day after Minas Gerais state said the dam burst caused losses to municipalities estimated at 1.2 billion reais ($303 million), not considering environmental problems. The federal government is seeking up to 20 billion reais in indemnities.
(Reporting by Roberto Samora; Additional reporing by Marta Nogueira and Roberto Samora; Writing by Caroline Stauffer; Editing by Bernadette Baum and Leslie Adler)
Samarco top executives take leave two months after Brazil dam burst
21 January 2016
Two top executives of Brazilian company Samarco Mineração SA, the joint venture between BHP Billiton and Vale involved in last year’s deadly dam burst at an iron ore mine, are taking a temporary leave of absence.
According to the company, chief executive Ricardo Vescovi and operations chief Kleber Terra, will focus now on preparing their defence as Brazil’s Federal police accused them of crimes relating to the Nov.5 incident that killed 17 people and polluted 850 kilometres (530 miles) of waterways in two states of southeast Brazil.
Prosecutors, noted the firm in an e-mailed statement, have not yet formally charged the executives. However, they face increasing accusations of mismanagement. The latest came from Brazil's TV Globo, which reported Sunday (in Portuguese) it had obtained documents showing that consultants hired by Samarco had warned management more than two years ago that safety was compromised at the Mariana dam.
According to the report, Minas Gerais investigators believe that Samarco also neglected key documents to obtain the dam's license. The company denies such accusations.
Brazil's federal government and Minas Gerais and Espirito Santo states filed a lawsuit in November asking Samarco, Vale and BHP to pay about $5 billion in damages.
Samarco Warned of Problems at Dam, Engineer Says
Joaquim Pimenta de Ávila consulted for mining company, inspected a crack 14 months before collapse
The banks of Brazil’s Rio Doce were flooded with mud last year after Samarco’s Fundão dam burst.
Wall Street Journal
17 January 2016
RIO DE JANEIRO—Brazilian mining firm Samarco Mineração SA was alerted to “severe” structural problems in one of its dams a year before it collapsed but didn’t take appropriate measures to fix them, an engineer who worked on the dam said.
Dam engineer Joaquim Pimenta de Ávila said he was consulting for Samarco when, in September 2014, he inspected a crack in its Fundão waste-storage facility. He believed it indicated the beginning of a break and said he recommended that Samarco step up monitoring and reinforce the Fundão dam with a buttress.
About 14 months later, the dam collapsed, releasing an avalanche of sludge that buried a rural village, killed at least 17 people and traveled more than 400 miles. Considered one of Brazil’s worst environmental disasters ever, the Nov. 5, 2015, incident has triggered a criminal investigation and a roughly $5 billion civil lawsuit by authorities against Samarco and its parent companies, mining giants Vale -3.00 and BHP Billiton -4.31
Samarco disputed Mr. Pimenta de Ávila’s account and said it followed his recommendations. In an interview Sunday, company lawyer Maurício Campos Júnior said it never received any warning of an “imminent” rupture from any of its consultants.
“Cracks or surges can occur in any dam,” Samarco said. “The operator’s duty is to report them, evaluate them and treat them adequately, with reports, technical recommendations and contracted projects, as Samarco always did.”
The company didn’t say whether it constructed the buttress Mr. Pimenta de Ávila says he recommended, but Mr. Campos said Samarco was in the process of strengthening the dam at the time it failed.
Like most tailings dams, Fundão was essentially an earthen embankment, built to contain waste from Samarco’s iron-ore mine. Failures of such structures often occur via a sliding phenomenon called liquefaction, typically when the soil becomes saturated with water, engineers say. Mr. Pimenta de Ávila said he recommended that Samarco construct a buttress at the base of the dam and design it to be strong enough to hold it even in this worst-case scenario.
Mr. Pimenta de Ávila, who is well regarded in Brazil as perhaps the country’s foremost tailings-dam engineer, has emerged as a key witness in a criminal investigation of Samarco and several of its officials by Brazil’s Federal Police. He spoke to The Wall Street Journal on Saturday after a statement he gave to the police in December was published by local newspaper Folha de S. Paulo.
The cause of Samarco’s accident remains unknown. But a series of minor tremors – with a magnitude between 2.0 and 2.6 – were registered in the hours leading up to it. Though they weren’t strong enough to have affected a sturdy tailings dam, some engineers have said the tremors could have triggered the Fundão dam’s liquefaction if it was saturated with water or in a precarious state.
Samarco also referred to the tremors in Saturday’s statement as it reiterated that the dam’s collapse was completely unforeseen. Mr. Campos said monitoring instruments on Nov. 5 indicated that the dam’s stability exceeded minimum requirements. The tremors, he said, were strong enough to break windows in Samarco’s administration building near the dams and to knock items off employees’ desks.
Samarco contracted Mr. Pimenta de Ávila to design and oversee the construction of the Fundão tailings dam between 2008 and 2012. When his contract expired that year, Samarco turned down his bid to renew it, he said. Mr. Pimenta de Ávila said that decision was likely made because of cost. Samarco declined to say why it didn’t renew his contract or who succeeded Mr. Pimenta de Ávila after 2012. The company hired Mr. Pimenta de Ávila back for part-time consulting work from October 2013 to 2015.
Though Mr. Pimenta de Ávila said the dam’s design changed substantially after 2012, Samarco said it followed his general guidelines and that all the recommendations he made as a consultant were followed.
“What I think was lacking was a belief in the worst-case scenario, that the worst-case scenario was viable,” Mr. Pimenta de Ávila said.
Mr. Pimenta de Ávila said he subsequently sought clarifications on the buttress design in 2014 but never heard back.
Samarco said Mr. Pimenta de Ávila was aware of what was being done in regard to his recommendations and never protested. The company said dam-break analyses by Mr. Pimenta de Ávila’s own firm didn’t project the scenario of a complete and sudden collapse.
“I think this is the conduct of someone who wants to avoid blame,” Mr. Campos said of Mr. Pimenta de Ávila.
The engineer, for his part, said he wasn’t responsible for the dam after 2012 because Samarco departed from his design.
Lindsay Newland Bowker, a Maine-based environmental risk manager who has been closely following the Samarco case, described Mr. Pimenta de Ávila’s allegations as “major.”
“He certainly would be more than qualified to make that judgment and his opinion would more than hold water, so to ignore that would be very serious,” Ms. Bowker said.
Residents of the village of Bento Rodrigues, a few miles down the valley from the dam, said they were alerted to the oncoming sludge by word-of-mouth rather than by Samarco, and local authorities said the company had no warning system in place for a dam break. Residents also said company officials repeatedly assured them of the dam’s safety in town meetings. The company doesn’t dispute this.
“We never heard that anyone thought it could break,” said José do Nascimento Jesus, a displaced town elder from Bento Rodrigues. He said the last time Samarco officials mingled with townspeople before the accident was in September.
“The duty to warn was when they had the crack,” said Ms. Bowker, who said cracks and bulges are “universally accepted” as warning signs. “There was time then. There was a whole year to prepare the town, assess the [potential] damage, and they didn’t do that.”
Samarco declined to directly answer a question about why it didn’t alert Bento Rodrigues when Mr. Pimenta de Ávila raised concerns about the dam.
“The dam was stable…until the date of the seismic occurrences, whose contribution to the event should be duly considered,” the company said.
Workers evacuated at Brazil's Samarco mine after new mudslide
25 January 2016
Brazilian miner Samarco Mineracao SA said on Wednesday it evacuated some workers after rain caused a mudslide at the site where an iron ore tailings damn burst in November, killing at least 17 people and leaving about 800 homeless.
Samarco, a joint venture between miners Vale SA and BHP Billiton, said in a statement the mudslide involved residual mud left in the area devastated by the earlier dam burst.
There had been no need to sound a newly-installed siren to warn local residents, according to Samarco who said the mudslide had not left its property.
The cause of the dam breach in November is still not known. The companies are investigating what occurred but have not yet given a date for when they expect to publish their findings.
Seeking answers to catastrophic Brazil mine disaster
Bento Rodrigues residents search for answers and accountability through the muddy remains of the town.
2 January 2016
Bento Rodrigues, Brazil - Bricklayer Wallison Henrique de Souza, 28, always dreamed of owning his own home.
In three years, he spent about $10,000 to build a small one-storey house next to his mother in Bento Rodrigues, a village in the Mariana district of Brazil's mineral-rich state Minas Gerais.
Mariana's economy is based on mining. Samarco - a joint venture between Brazil's Vale and Anglo-Australian BHP - is one of the region's biggest employers, extracting iron ore and depositing waste in the nearby Fundao dam.
In early November, one of de Souza's colleagues arrived at the house shouting that the dam had burst and the village needed to be evacuated.
"Everyone was panicking, we didn't have any plan of where to go," he said.
De Souza ran to a high rock for safety. Shortly after, millions of tonnes of mud engulfed Bento Rodrigues, wiping it off the map. De Souza and some 600 others lost their homes. Altogether, 17 people were killed with two still missing.
"We knew it was bad, but never imagined that it would be this awful," he said.
The worst mining disaster
The Mariana mining disaster is widely regarded as Brazil’s worst ever environmental disaster
From Bento Rodrigues, the mud travelled 600km across two Brazilian states leaving hundreds of people homeless before entering the region's most important river, the Rio Doce, killing fish and polluting water supplies, then spilling into Atlantic Ocean off the coast of Espirito Santo state.
Experts, including members of the UN Human Rights Commission that visited Brazil after the disaster, have attributed the bursting of the dam to a severe failure in the preventive approach by the managing companies, as well as inadequate enforcement of regulation in Brazil's mining sector.
Fisherman Moises Gomes picks a dead fish from the Rio Doce before pulling it apart to show it is full of mud [Sam Cowie/Al Jazeera]
Returning to Bento Rodrigues for the first time with Al Jazeera, sitting in front of the ruins of his mother's house, De Souza - now living in one of Mariana’s hotels and receiving a minimum salary, paid for by Samarco - said he felt empty.
"My whole life, 28 years, is buried under this mud," he said.
Samarco, Vale, BHP negligence
At the Paris climate change conference, Dilma Rousseff, the Brazilian president, described the event as "the worst environmental disaster Brazil has ever seen" and blamed the "irresponsible action of the company".
Samarco was fined $265m but the Brazilian government is now seeking compensation of more than $5bn. Holding companies Vale and BHP's assets in Brazil have been frozen until the damages are paid.
The reason for the bursting of the dam is still unknown. Experts however, say there was a clear failure by the company to avert the disaster and to minimise subsequent damage.
On its website, Samarco says: "From the beginning, with the support of our shareholders, Vale and BHP Billiton, we mobilised all efforts to prioritise the care and integrity of the people who were at the scene or nearby."
In Barra Longa, however, a small town 70km from the dam, residents affected by the disaster say Samarco and local government's response was slow.
"The volunteers from churches across the nation came first to help us, then the Samarco workers a week later," said Francisco Marcelino, a retired driver, speaking from his home, which was swamped by two metres of mud.
The full extent of the environmental damage is unknown. In the weeks following the disaster the mud was found to contain high levels of arsenic and other toxic materials. Experts estimate that the region could take anything from 10 to 50 years to recover, if it actually does. A full environmental assessment is yet to be made.
The short-term impact, however, is visibly catastrophic. The mud has polluted the 800km-long Rio Doce, killing millions of fish, destroying fauna and wildlife and polluting drinking water supplies. Thousands of fishermen dependent on the river for their livelihood, and several fishing unions, have launched law suits against Samarco.
Fishermen on the Rio Doce, some 300km from the dam. The river is polluted and millions of have died [Sam Cowie/Al Jazeera]
"How can I feed this fish to my kids, or to someone else's kids?" said fishermen Moises Gomes speaking from a fishing boat on the now orange Rio Doce in Periquito, around 300km from the main spill. He picked a floating dead fish out of the river, pulling it apart to show it was full of mud.
"The companies must create a mechanism for us to have the right to work and feed our families," he said.
Murilo Ferreira, the chief executive of Vale, said that the company would create a "voluntary fund dedicated to restoring the river Rio Doce".
Brazil economic development vs regulation
In the past 20 years there have been at least four dam bursts in the Minas Gerais region, although none as serious the Bento Rodrigues disaster.
A report by the UN Commission on Human Rights, which was invited to Brazil by the federal government, said that there were about 753 dams in the Minas Gerais region, 40 of which were "at risk".
Analysts say that Brazil - like most developing middle-income country, rich in natural resources - needs big projects to create investment, wealth and jobs and, as a result, regulations are often overlooked.
Mining accounts for around 4 percent of the country's GDP and a quarter of exports.
"When it comes to development, the economic side usually prevails over the social and environmental," said Dante Pesca, a member of the UN working group, adding that relatively low fines - most of which aren’t fully paid - create negative incentives for companies to take risks.
Pesca said that while Brazil had made positive steps recently - especially aligning state-owned companies with Organisation for Economic Cooperation and Development guidelines two months ago - the political will to implement sufficient regulations was weak.
"The big point here is not the 'official' political commitments - otherwise we would not have been invited to Brazil," he said. "But what we found on the ground is a real disconnect between the political statements and commitments and the operations."
Back in Bento Rodrigues, residents search through the muddy remains of the town. A group of teenage boys play in a car stuck in the mud and let out a dry laugh when they discover the battery has already been taken.
Wallison Henrique de Souza finds a medal he won at sports day as a child and a fridge magnet bottle opener.
"I would come back here if I could, but unfortunately we can't. It's all over," he said.