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BHP still uncertain on Samarco restart

AAP logoAAP 17/11/2016 Prashant Mehra

Global miner BHP Billiton says it has no clarity over the timing of a potential restart at its Samarco joint venture operation in Brazil, underlining the continuing uncertainty over the business that was hit by a fatal dam disaster last November.

Chief executive Andrew Mackenzie said on Thursday BHP was continuing to work with Samarco and the joint venture's partner - Brazilian iron ore giant Vale - but offered no timeline for a resumption.

"Samarco directly employs several thousand people in well-paid jobs, so restart is important for the health of the local economy and Brazil's for that matter," he told shareholders at the company's Australian annual general meeting.

"But it has to make economic sense, and have a practical set of approvals in place, and we continue to work through these processes," he said.

Operations at the Samarco mine have been suspended since the fatal tailings dam disaster a year ago that killed at least 19 people and led to widespread environmental damage. The mine normally produces 30 million tonnes of iron ore annually.

The two partners had previously hoped to restart operations in 2016 but have not been able to secure all regulatory approvals.

Earlier, speaking at his last BHP annual general meeting before retiring, chairman Jac Nasser said he was deeply sorry for the tragedy but defended BHP's rehabilitation efforts in the aftermath of the disaster.

Mr Nasser said following the episode a governance review, which has resulted in centralising responsibilities for all its non-operated minerals joint ventures under the head of its Minerals Americas business.

It has also created a new global tailings dam standard across its operations that will draw on international practice for the design, operation and maintenance of the dams, he said.

BHP and Vale in March struck a $US2.3 billion rehabilitation agreement with government authorities there to cover for the clean-up costs and damages from the disaster.

The complete financial hit remains uncertain after a Brazilian court in July agreed to reinstate a rival civil claim of $US6.2 billion. Brazil's federal prosecutors have also filed criminal charges against eight current or former BHP employees in relation to the dam disaster.

BHP has said it will defend the charges against the company, and fully support each of the affected individuals.

Mr Nasser, once the US-based global chief executive of the Ford Motor Company, also said it was too early to guage what impact the proposed protectionist policies of US President-elect Donald Trump might have if imposed.

Mr Trump has threatened to put a 45 per cent tariff on Chinese imports as part of a move to protect US jobs.

Mr Nasser said no one understood what the impact of such tariffs might be but expressed a belief the US would not take damaging action.

"You never bet against the US and I don't think they're going to do things that will hurt the US," he said.

"If they don't do things that will hurt their country I think, generally speaking, things get worked out."

BHP shares closed eight cents higher at $24.06.

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