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BHP has indicated a restart of the troubled Samarco iron ore mine in Brazil could occur in the year ahead at a reduced capacity, with applications to recommence mining at the venture already lodged to do so.
But to achieve that a refinancing of the project, which is a venture operated jointly with Brazil's mining giant Vale, is necessary, it said.
An investigation into last year's Samarco mine disaster in Brazil has found the fatal collapse was due to construction and design flaws. Vision courtesy ABC News 24.
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An investigation into last year's Samarco mine disaster in Brazil has found the fatal collapse was due to construction and design flaws. Vision courtesy ABC News 24.
The aftermath of a mudslide caused by the Samarco dam failure.
Photo: Leo Correa
"A restart of Samarco operations is important for Samarco, BHP Billiton Brasil, Vale, the local communities and for the Brazilian economy," BHP said in a statement Wednesday. "Samarco has submitted licensing applications ... for Samarco to restart operations at reduced capacity.
"A restart of operations is technically feasible in 2017, however, restart will occur only if it is safe to do so and the necessary approvals are received from Brazilian authorities.
"A restructure of Samarco's debt that enables Samarco to be economically viable is also required to allow Samarco to move forward."
In October, Samarco missed a payment on an outstanding bond issue, underscoring the need for a refinancing to return the mine to production. No indication of the likely capital cost of a restart has been given.
Design and construction flaws extending as far back as 2009 have been blamed for the failure of a dam at the mine. A detailed report into the dam's failure pointed to a series of issues beginning with construction flaws in 2009 that required design changes and the incorporation of greater water saturation than originally envisaged, for progressively leading to the failure.