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Samarco Mineração restart faces new challenge from Brazilian mayor

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Samarco Mineração restart faces new challenge from Brazilian mayor

A mayor in Brazil declined to approve a plan for Samarco Mineração SA to continue to use water from a nearby river, preventing the completion of an ongoing environmental study that is required by Minas Gerais state regulators to restart the Samarco mine operations, Bloomberg News reported Jan. 26, citing a source familiar with the matter.

"There are environmental impacts related to the water supply that need to be thoroughly studied," Leris Braga, mayor of Santa Barbara city, said. Braga is asking for a separate study to test possible disruptions to the river's water flow.

According to the source, who requested anonymity, the BHP Billiton Group and Vale SA joint venture is likely to complete the environmental impact study required for an operating license by July at the earliest, even if it manages to resolve Braga's objections.

If the company is unable to address Braga's concerns, the due date for the study completion could be pushed back further, making the possibility of Samarco's restart more difficult within the current year.

In December 2016, Samarco Mineração CEO Roberto Carvalho said the company expects to secure a preliminary environmental license for Samarco in the first quarter of 2017, which would be one of the three required for its restart since its suspension in November 2015 due to a fatal tailings dam failure.

A company spokesperson said in an emailed statement that Samarco Mineração is providing all the necessary information to Santa Barbara as well as taking all necessary steps to resolve the situation.

"A restart of operations is technically feasible in 2017," but the "restart will occur only if it is safe to do so and the necessary approvals are received from Brazilian authorities," BHP Billiton said in an email.