BHP Billiton And Vale Expect Writedowns Of More Than $2 Bln On Dam Spill

(RTTNews) - BHP Billiton Ltd. (BHP.AX, BLT.L, BBL, BHP) and Vale SA (VALE) will book charges totaling more than $2 billion after last year's tailings dam spill at their joint venture in Brazil that killed as many as 19 people.

BHP noted that it will take a charge of $1.1 billion to $1.3 billion for the six months to June 30, along with direct costs of about $100 million.

Separately, Vale said it will book R$3.7 billion or $1.2 billion in its second-quarter results.

BHP Billiton Chief Executive Officer, Andrew Mackenzie said: "The recognition of the provision demonstrates our support for the long-term recovery of the communities and environment affected by the Samarco tragedy and the belief we have that the Agreement is the most appropriate mechanism to do this."

The BHP Billiton Board of Directors also approved US$134 million to support the Foundation to allow the continuation of reparatory and compensatory programs. This amount will be offset against the provision recognised today.

BHP noted that a further short-term facility of up to US$116 million is being made available to Samarco to carry out remediation and stabilisation work and to support Samarco's operations. Funds will be released to Samarco only as required and subject to the achievement of key milestones.

Vale said it expects to contribute about $150 million to the Foundation in the second-half of 2016, with this amount offset against the abovementioned R$ 3.7 billion provision.

In addition, Vale intends to make short-term facilities of up to US$ 100 million to Samarco to support its operations, without undertaking an obligation to Samarco. Funds will be released on an as-needed basis and will be subject to Samarco achieving certain milestones. Likewise, BHP Billiton will make available to Samarco similar short-term facilities.