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BHP Billiton and the Bento Rodrigues Dam Disaster |
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| The history of Billiton dated back to the mid-18th century when on June 28, 1851, a rich reserve of tin was discovered on Billiton (Belitung) Island, Indonesia. On September 29, 1860, NV Billiton Maatschappaij was established in The Hague, Netherlands. After two months, the company acquired the mineral rights of two islands, Banka and Billiton.
In 1935, during World War II, Billiton expanded its business activities, establishing the first bauxite mine on Bintan Island in Indonesia. Six years later, Billiton started mining bauxite in Suriname, South America. Bauxite was the raw material for aluminum, the lightweight metal for which demand was high during World War II.
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| On May 16, 2001, BHP and Billiton received shareholder’s approval to merge and on June 5, 2001, the merger got approval from Foreign Investment Review Board (FIRB). On June 29, 2001, BHP Billiton became a dual listed company on the LSE and the ASX. The company was headquartered in Melbourne, Australia. ... |
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| On November 5, 2015, the Fundão tailings dam failed at an open-cast mine operated by Samarco. The operation included a three-tiered dam complex containing mine tailings – a mining waste product of metal filings, dirty water, and possibly chemicals (Refer to Exhibit III for a Note on How Tailing Dams Work). Within this complex, the Fundao dam failed, and the downstream Santarem dam was affected. Samarco was monitoring the third dam, Germano. The mine, which had an annual capacity of roughly 30 million tonnes, remained closed after the disaster.. |
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| The collapse of the mining dam was undoubtedly one of the biggest environmental disasters in Brazil’s history. The images of Bento Rodrigues district covered in mud and the Rio Doce River flooded with mining waste left the nation deeply shocked. “There was a huge impact from an environmental point of view. It is not a natural disaster. It is a disaster prompted by economic activity, but of a magnitude equivalent to those disasters created by forces of nature,” Said Izabella Teixeira, Minister of Environment in Brazil.. |
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| In response to the allegations of negligence, BHP Billiton asserted that its three dams in the complex – including the one that burst – had their appropriate licenses. BHP Billiton and Vale also ordered an external investigation led by a panel of geotechnical experts and US lawyers Cleary Gottlieb. .. |
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| In November 2015, Samarco agreed to pay R$1billion ($250 million) in cleanup costs and compensation, as well as a fine of R$250 million ($66 million) to the federal environmental agency Ibama. .. |
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| Samarco expected to re-open the mine before the end of 2016. Before the collapse of the dam in November 2016, the company had been the world’s second-largest producer of iron-ore pellets with an annualized output rate of about 30 million metric tons. It expected production at the mine to resume at 60% below its original capacity and for it to continue at that level for the next two to three years. |
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Exhibit I:Cities and Communities Affected by the Dam Disaster
Exhibit II: Financial Highlights of BHP Billiton (2011-2015)
Exhibit III: A Note on How Tailing Dams Work
Exhibit IV: BHP Billiton Share Price (US$) |
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