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UPDATE 1-Brazil's Vale says Samarco future reliant on its infrastructure

Published 28/10/2016, 01:02 am
© Reuters.  UPDATE 1-Brazil's Vale says Samarco future reliant on its infrastructure
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(Adds CEO quotes)

BRASILIA, Oct 27 (Reuters) - Samarco, the troubled joint venture between Vale SA VALE5.SA and BHP Billiton (LON:BLT) BHP.AX , will need to use infrastructure from Vale's neighboring mines if it wants to secure a long-term future, Vale's chief executive said on Thursday.

BHP Billiton and Vale did not currently see eye-to-eye about how to restart Samarco's mine, which was shut last year after a deadly dam burst, Murilo Ferreira said on a conference call to discuss third-quarter results. Earlier on Thursday, Vale posted third quarter net profit of $575 million. have to admit to you that there exists a certain misalignment between Vale and BHP in relation to the process of restarting Samarco," Ferreira said.

"We think Samarco is not viable on the old structure of tailings storage," said Ferreira, adding he did not regard a rebuilding of the dam, which had collapsed, as feasible.

Instead, Vale recommended that Samarco shares infrastructure with a bordering complex of mines. Ferreira did not provide details of how this would work.

Ferreira said he planned to talk to BHP Chief Executive Andrew Mackenzie next week to try and come to an agreement.

"I hope we can advance," he said.

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