BHP reviewing facilities, JVs after Brazil

BHP Billiton boss Andrew Mackenzie says the company is assessing dam structures at all global facilities following the accident at Samarco mine in Brazil.

BHP Billiton's CEO Andrew McKenzie

BHP says there is uncertainty over the timing of a potential restart to its Samarco operations. (AAP) Source: AAP

BHP Billiton is assessing dams at all its facilities around the world following the deadly dam disaster in Brazil.

The global miner is also reviewing arrangements at two other mining joint ventures following the dam failures at its Samarco mine in Brazil.

BHP boss Andrew Mackenzie told analysts and investors the reviews were part of an effort to ensure the vast bulk of its employees are safer and its assets more efficient.

"We are carrying out a thorough review of all of our dam facilities of scale around the organisation," Mr Mackenzie said on a conference call late on Monday.

Nine people have died so far and 19 are still missing after two tailings dams burst at the Samarco iron ore mine in Brazil on November 5. The disaster has also rendered more than 630 people homeless and coated a two-state area with mud and mine waste.

Samarco is jointly owned by BHP Billiton, the world's largest mining company, and Brazil's Vale, the largest iron ore miner.

On Monday, Samarco committed to set aside at least $US260 million ($A366 million) for environmental damage from the accident, Brazil's state prosecution service said.

BHP and Vale are already setting up an emergency fund with an initial $US100 million ($A141.70 million) for relief efforts, but analysts estimate the clean-up bill could cost more than $1 billion.

Mr Mackenzie told analysts the immediate priority remained humanitarian relief, but his company is committed to restore the environment and safely restart mining operations at the site.

BHP has a growing team on the ground including geotechnical, disaster relief and humanitarian response experts, health and safety executives, environmental scientists and support staff.

The mining giant is also reviewing the structures of its Cerrejón coal joint venture in Colombia and the Antamina copper and zinc joint venture in Peru, where it is not the operator.

"The other thing that we will look into is the arrangements that we have at Samarco which mirror similar arrangements we have at Antamina and Cerrejón," Mr Mackenzie said.

"That is the kind of arrangement we need to review to decide... whether a more petroleum-type model might be more appropriate in the future."

BHP has one designated operator at its petroleum joint ventures.

The Cerrejón coal mine is owned equally by BHP, Anglo American and Glencore, while BHP and Glencore each have 33.75 per cent stake in Antamina, while Teck Resources holds 22.5 per cent and Mitsubishi Corp 10 per cent.

Mr Mackenzie would not discuss the depth of insurance cover or dividend implications of the disaster, saying this was a complex situation and it would be wrong to give an over-simple answer.

Samarco generates about three per cent of BHP's underlying earnings before interest and tax, and the company has said it is reviewing its iron ore production guidance for fiscal 2016, following the incident.

BHP shares, which have slumped more than 10 per cent since the Brazil accident, closed 27 cents higher at $20.37 on Tuesday.


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Source: AAP



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