In a significant development, the court has given its approval to Samarco’s judicial recovery plan. The plan includes the participation of Vale and BHP, the companies controlling Samarco, in the disbursements related to the rupture of the Fundão dam. This rupture, which occurred in Mariana in 2015, tragically resulted in the loss of 19 lives.
Vale, in a securities filing made in June, has stated that Samarco is expected to emerge from the recovery process with a “lean capital structure.” Payments to creditors will be made gradually, in line with Samarco’s cash flow and the ramp-up of its operations. As part of the plan, Samarco’s contribution towards reparation will be capped at $1 billion from 2024 to 2030. Any additional contributions from the joint venture will depend on the excess cash flow it generates. The remaining balance for reparation will be shared equally between Vale and BHP.
Luiz Fabiano Saragiotto, the restructuring director of Samarco, has acknowledged the efforts of all parties involved in reaching this agreement. He believes that the current plan, with important concessions, can pave the way for a balanced and lasting solution.
Samarco has faced financial difficulties since the dam disaster in 2015, leading to a halt in its operations. However, the company resumed partial production in December 2020, marking a positive step forward.
(This article was sourced from Reuters)