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Reuters reported that Vale (NYSE:VALE) said that the cost of the Samarco dam burst at the iron mine in Brazil had already exceeded the insurance cap for civil damages.
Reuters reported that Vale (NYSE:VALE) said that the cost of the Samarco dam burst at the iron mine in Brazil had already exceeded the insurance cap for civil damages.
As quoted in the market news:
Samarco, owned by Vale and BHP Billiton, has been fined 250 million reais ($65.5 million) and forced to pay for accommodations for the dispossessed, after a dam burst earlier this month, killing at least seven people, with 15 still missing.
Brazilian state and federal prosecutors said on Monday that Samarco had agreed to pay a preliminary 1 billion reais ($262 million) to cover the cleanup costs and compensation.
“In terms of civil damages, Samarco’s insurance policy is well below even the initial values being discussed in terms of costs,” Vale’s chief financial officer, Luciano Siani, said on a conference call, adding the 250 million-real fine was already larger than the cap on the policy.
Insurance to cover the suspension of production and cost of rebuilding elements of the mine, such as the dams, is higher, Siani said, without giving details.
Samarco, Vale and BHP are scrambling to control the fallout from the disaster, which has polluted the Rio Doce river across two states.