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Mining company Samarco to pay Brazil dam disaster damages

The owners of an iron ore mine in Brazil have settled with the government for a deadly dam spill. The toxic flood was the country's worst environmental disaster, polluted waterways and left 17 people dead.

An estimated $6.2 billion (5.7 billion euros) is to to be paid by mining company Samarco and its owners over a period of fifteen years as part of an agreement for damages caused by last November's deadly dam spill. The funds will go toward remedying social and environmental damage.

At the ceremony to sign the agreement in Brasilia on Wednesday, President Dilma Rousseff said: "We want to build new life on the rubble of an unprecedented tragedy."

Brazil's worst environmental disaster forced hundreds of people to leave their homes and polluted one of the country's main rivers. A dam burst at a mining waste site unleashing a deluge of thick, red toxic mud that smothered a village.

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Seventeen people were confirmed killed and two missing, presumed dead. A further 75 were injured. The mud and water swept over nearby towns and polluted hundreds of miles of waterways in two states in southeastern Brazil.

Joint venture

Samarco, a joint venture between Brazil's Vale S.A. and the Anglo-Australian BHP Billiton, have entered an agreement with state and federal authorities for the restoration of the environment and communities affected by the Fundao dam failure, BHP Billiton said in a statement on its website on Wednesday.

Last month, the president of Samarco and six others were charged with homicide over the deaths. Police in the state of Minas Gerais requested that Samarco President Ricardo Vescovi, five other company executives and one contractor be held in preventative detention while they await trial. The men were charged with homicide, causing a flood and polluting drinking water.

The agreement announced on Wednesday "provides a long-term remedial and compensation framework" through 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," according to BHP Billiton.

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."

In a separate statement outlining the agreement, Brazil's Vale said that in the event Samarco was unable to pay its obligations, Vale and BHP would be responsible for covering the costs. Vale said the accord did not cover private civil suits, other public civil suits or criminal investigations.

jm/bw (Reuters, AFP)

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