Vale and BHP Billiton have agreed through a non-binding term sheet to allow jointly-owned pellet producer Samarco to use one of Vale’s pits to store Samarco’s tailings, BHP Billiton announced this week.
Under the general terms and conditions of the agreement, Vale would transfer the Timbopeba pit to Samarco and, in exchange, Samarco would supply to Vale an amount of non-processed ore (Run-of-Mine – ROM) for a “certain period.”
The agreement, which is yet to reach its definite terms, means one more step for Samarco to resume activities in 2017.
BHP Billiton noted a definite agreement “remains subject to a successful commercial negotiation, due diligence and relevant government approvals,” although the company did not disclose a specific timeline for the agreement to be completed.
Samarco is expected to temporarily deposit its tailings at its own pit, Alegria Sul, for a period of 2 to 3 years, as it resumes operations. The use of the Alegria Sul pit depends on the approval of the required environmental licenses.
“The use of the Timbopeba pit may allow Samarco to operate for up to several years without a new tailings structure,” BHP Billiton said, adding Samarco will only restart if “it is safe and economically viable to do so.”
“Restart is also contingent on a number of matters including obtaining required regulatory approvals and appropriate support of stakeholders,” BHP Billiton said.