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UPDATE 1-Brazil miner Samarco says resuming operations this year challenging

Published 24/05/2017, 07:12 am
© Reuters.  UPDATE 1-Brazil miner Samarco says resuming operations this year challenging
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(Updates with details throughout)

By Marta Nogueira

RIO DE JANEIRO, May 23 (Reuters) - Brazilian iron ore miner Samarco Mineração SA SAMNE.UL believes resuming operations this year will be challenging, though there remains a small possibility, Roberto de Carvalho, chief executive officer, told Reuters on Tuesday.

The company, which halted operations in November 2015 after a dam burst, said talks are continuing with the government to obtain the required environmental licenses.

"It is getting increasingly tight to resume operations this year," Carvalho said in a telephone interview. "Each day that passes makes it tighter."

The dam's collapse killed 19 people and triggered Brazil's worst environmental disaster, with toxic mud polluting rivers and flowing hundreds of miles to the Atlantic Ocean.

Addressing lawmakers at the Minas Gerais state assembly, Carvalho said mayors in the areas affected by the accident support the company's efforts to resume operations because it would create jobs.

With $3.8 billion in outstanding debt obligations, the production halt has been detrimental to negotiations aimed at a restructuring agreement with creditors, the executive said.

"We have been in talks with banks and bondholders, but the basic condition is that the company resumes operations," said Carvalho.

Samarco is a 50-50 joint venture between Vale SA VALE5.SA and Australia's BHP Billiton (LON:BLT) Ltd BHP.AX . Carvalho said both companies continue to fully support the company.

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