PERTH (miningweekly.com) – Diversified major BHP Billiton and its joint venture (JV) partner Vale have reached an agreement with Brazilian authorities on funding to compensate for the 2015 incident at the Samarco project, which left 17 people dead and two still unaccounted for.

Under the terms of the agreement, Samarco, Vale and BHP would establish a foundation that would develop and execute environmental and socioeconomic programmes to remediate and provide compensation for damages caused by the Samarco dam failure.

During 2016, Samarco would contribute $500-million to the foundation, less the amount of funds already spent, with 2017 and 2018 funding set at $300-million a year.

The amount of yearly contributions between 2019 and 2021 would vary from a minimum of $200-million to a maximum of $400-million, depending on the remediation and compensation projects to be undertaken in each particular year.

To the extent that Samarco did not meet the funding obligations, the JV partners would be liable for the funds in proportion to the JV shareholding in Samarco.

The agreement would run for a period of 15 years, and would be renewable for periods of one year successively, until all obligations under the agreement had been performed.

BHP said on Thursday that the foundation would be governed by a seven-member board, with Samarco, BHP and Vale each appointing two members, and the Brazilian authorities appointing one member.

The foundation would submit remediation and compensation programmes for approval to a council consisting of representatives from the Brazilian authorities, and its activities would be subject to independent external audit.

“The agreement is an important step forward in supporting the long-term recovery of the communities and environment affected by the Samarco dam failure. It provides a platform for the parties to work together to support the remediation of affected areas,” said BHP CEO Andrew Mackenzie.

“This agreement demonstrates our commitment to repairing the damage caused and to contribute to the lasting improvement in the Rio Doce.”

The agreement was subject to court approval, and if approved, would settle the civic lawsuit launched by the Brazilian authorities against Samarco in November of last year.

Meanwhile, Samarco would continue to conduct and fund the humanitarian and environmental recovery and remediation work until the foundation was operational, which was expected to be within the next few months.