THE Samarco joint venture between Vale SA and BHP Group has been given approval to resume operations at the Germano iron ore plant in Brazil, four years after a fatal dam collapse there.

It is understood that 10 of the 12 members of Minas Gerais state environmental council, known as Copam, voted in favour of an operational corrective licence for the mine.

Samarco has had its operations halted since the 2015 Fundão waste dam collapse that killed 19 people and resulted in flooding across more than 600km in one of the worst environmental disasters in the country’s mining history.

The mining dam failure had affected the downstream Santarem dam, causing a “significant release” of mine tailings to flood the nearby community of Bento Rodrigues and surrounds.
The owners have been working to get all permissions to restart, with the aim of reaching 8mt of production in the second half of 2020 and full capacity of about 26mt of pellet production by around 2030.

As soon as Samarco’s business plan is approved by its owners, the company is expected to resume paused talks with creditors.

The JV has $2.9b in defaulted debt, and restructuring talks were put on hold in January when Vale suffered an even worse disaster at a mine in Brumadinho, also in the state of Minas Gerais.

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Resumption will be contingent on a filtration system – which will take about a year to build – that will allow Samarco to use dry stacking technology to dispose of minings waste, replacing the previous tailings dam-based system.

The mine, which once produced nearly 25mt of iron ore a year, will restart at an annual rate of less than a third of that, with a potential increase to 14-16mt within another six years.

Reconstruction efforts at the mine in January 2017. Image: BHP.

The Samarco joint venture signed a deal with state and local authorities in March 2016 to create a foundation to oversee the clean-up after the disaster.

It has spent more than $1.5b so far but some victims have complained about the slow pace of rebuilding efforts.

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