BHP-Vale Mine Restart Encounters New Obstacle: Small-Town Mayor – by R.T. Watson (Bloomberg News – January 26, 2017)

BHP Billiton Ltd. and Vale SA’s crippled Samarco mine, once the world’s second-largest producer of iron-ore pellets, has a new obstacle threatening to slow its much-anticipated restart: a small-town mayor.

The Brazilian city of Santa Barbara declined to sign off this week on a plan for Samarco to continue to use water from a nearby river. Without the approval, Samarco won’t be able to complete an ongoing environmental study required by state regulators for a restart, a person familiar with the matter said, asking not to be identified because the matter is private.

“There are environmental impacts related to the water supply that need to be thoroughly studied,” Leris Braga, the 34-year-old mayor of the town of 30,000 people in Minas Gerais state, said by telephone. He is calling for a separate study to be done to test for possible disruptions to water flow.

The Samarco Mineracao SA joint venture has been shut since a November 2015 tailings dam ruptured, polluting waterways in two states and killing as many as 19 people in an incident called Brazil’s worst environmental disaster.

The closing also has left thousands without jobs and prompted Samarco to stop paying interest on $2.2 billion in bond obligations.

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