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Vale allows use of nearby pit for storing Samarco tailings

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Vale allows use of nearby pit for storing Samarco tailings

Brazilian iron ore miner Vale SA will allow the use of its nearby Timbopeba pit to deposit Samarco tailings should it resume operations.

Vale will transfer the Timbopeba pit to Samarco Mineração SA in exchange for supplying raw run-of-mine ore. Samarco is a 50/50 joint venture between Vale and BHP Billiton Group, but operations were suspended in November 2015 following a tailings dam failure.

The deal will become definitive pending commercial negotiations, due diligence and government approvals.

After getting the required permits, Samarco would be able to deposit tailings in its own Alegria Sul pit for up to three years, but operations could run up to seven years at the Timbopeba pit without the need for a new tailings structure.

Samarco expects to secure a preliminary environmental license in the first quarter of 2017, its CEO Roberto Carvalho said earlier in December. The license would be one of three required to resume operations.

An official at Brazil's Minas Gerais state environmental regulator, Semad, signaled in November that a mid-2017 restart for Samarco was still possible.

A return to operations is vital for Samarco to repay more than US$3 billion debt, as it has already missed two interest payments.