BHP Billiton and Brazilian miner Vale have struck a preliminary agreement with Brazilian prosecutors, which lays out a path for a future settlement of the largest legal claim eminating from the Samarco dam disaster.
The dam disaster killed 19 people in the Brazilian state of Minas Gerais in November 2015, and as the owners of Samarco, BHP and Vale have been locked in legal negotiations with Brazilian regulators and prosecutors ever since.
The Brazilian government agreed to a reparation and rehabilitation package worth 9.2 billion Brazilian Real ($3.7 billion) in March 2016, but that deal was suspended when independent federal prosecutors in Brazil lobbed a 155 billion Brazilian Real ($63.7 billion) claim in May 2016.
BHP said on Thursday that a "preliminary agreement" had been struck with the independent prosecutors, which was designed to deliver a settlement of the latter, larger claim by June 30, 2017.
"The preliminary agreement outlines the process and timeline for negotiation of a settlement of the (155 billion Real) civil claim relating to the dam failure," said BHP in a statement to the ASX.
The Samarco partners will now provide an interim security of 2.2 billion Brazilian Real ($900 million) to support a series of programs under the preliminary agreement, including the appointment of experts to advise the prosecutors on the social and environmental impacts of the disaster.
The interim security will be a mix of bonds, "liquid assets" and a charge over the Samarco iron ore assets.
In a boost for the Samarco partners, the interim security will replace three injunctions that were collectively worth more than $US8 billion.
Those injunctions had not yet been paid, but their suspension allows BHP, Vale and Samarco to free up cash.
BHP said the possible restart of the Samarco operations, which have been shutdown since the disaster, was the subject of separate negotiations, and partners would need to resolve issues over Samarco's debt plus win licences from Brazilian regulators before being able to restart.
It is believed Thursday's preliminary agreement has no relation to the criminal charges that have been laid against 21 individuals, eight of whom were current or former BHP staff.
BHP shares closed 17¢ higher at $26.69.
