Vale’s JV company Samarco, a 50/50 JV between the mining giant and BHP Billiton, will pay a $66 million fine for the deadly burst at a waste iron ore dam in the city of Mariana, in the state of Minas Gerais, Brazil’s president, Dilma Rousseff said on Thursday.
According to the president, Samarco will be held accountable for the tragedy. The burst is expected to have a negative impact in Vale’s output in about 3 million mt in 2015 and 9 million mt in 2016, according to a company’s filing at the nation’s stock exchange commission, CVM.
To date, eight people were killed and 19 remain missing, with more than 600 left homeless, according to media reports.
"First, we are committed to put the blame on those who are responsible [for it]. Who is responsible? A private business, Samarco, a big business that has Vale and BHP Billiton as partners," Rousseff said, adding "several laws... were actually not followed."
According to the president, Samarco will immediately face BRL 250 million ($66.4 million) in fines for damages to the environment and water supplies and other related impacts. The two partnering companies may also pay other fines, she said.
Brazilian authorities determined on Tuesday Samarco should collect and preserve evidence related to the failure of the dam, making it easier for victims to be compensated. If the company fails to comply with the order, it will face a daily fine of about $13,000.
BHP and Vale have also provided experts in health, security and the environment, they said.
Minas Gerais officials ordered Samarco to halt operations, and the company has put 85 percent of its employees in both Minas Gerais and neighboring Espirito Santo on paid leave.
Carlos Eduardo Ferreira Pinto, a state prosecutor specializing in environmental cases, alleged there was "negligence" involved.
The governor of Minas Gerais, Fernando Pimentel, said the two companies weren’t doing enough to address the problems caused by the disaster, including the interruption of water service for hundreds of thousands of residents downstream.