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BHP Billiton to grant up to US$42M short-term facility to Samarco Mineração

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BHP Billiton to grant up to US$42M short-term facility to Samarco Mineração

BHP Billiton Group said Dec. 22 that it will grant a short-term facility of up to US$42 million to Samarco Mineração SA to fund ongoing repair works, restart planning, and maintenance of facilities in Brazil.

The Vale SA-BHP joint venture halted operations in November 2015 due to a tailings dam burst at its namesake Samarco iron ore mine in the country's Minas Gerais state.

An additional US$6 million will be made available to Samarco Mineração to cover fees payable to experts appointed in connection with the remediation and compensation programs.

Additionally, the company will extend US$133 million to the Renova Foundation to undertake remediation and compensation programs identified under the March 2016 agreement between Samarco Mineração, Vale and the Brazilian authorities.

The US$181 million total is BHP's share of planned financial support, with Vale announcing Dec. 21 that it will also make short-term facilities of up to US$48 million available to Samarco, with US$42 million earmarked to support operations in the first half of 2018.

Vale said that it expects to contribute about 432 million Brazilian reais in the first half of 2018, offsetting the 3.7 billion reais provision recorded in the second quarter of 2016.

In June, Vale and BHP each granted a short-term US$76 million credit facility to Samarco, while BHP provided US$174 million to Renova for remediation and compensation programs.

As of Dec. 21, US$1 was equivalent to 3.31 Brazilian reais.