SAO PAULO – Samarco Mineracao, the Brazilian mining venture that hasn’t operated since a deadly dam collapse in 2015, is close to regaining a licence to restart production and move closer to paying back $3.5-billion in defaulted debt.

The licence will most likely be granted within the second half of this year, the Minas Gerais state environmental agency press department said in an email. A Samarco spokeswoman declined to comment. Negotiations with creditors will resume in October following the license renewal, according to a person with direct knowledge of the plans.

The venture, jointly owned by Vale and BHP, has already reached an agreement with the regulator and could get formal permission to operate as soon as mid-September, said people familiar with the regulatory situation, who asked not to be named because talks between the company and the government are private.

“There might be some optimism that Samarco can get theirs later this year to restart in 2020,” said Roger Horn, a senior emerging-markets strategist at SMBC Nikko Securities America in New York. “The bigger issue is how quickly they can ramp up” to start servicing their debt.

The miner’s November 2022 bonds rose as high as 76.181c on the dollar on Wednesday from 75.75c the day before, according to Trace price data.

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Samarco has been advised by Lina Pimentel, a former Greenpeace lawyer and now environmental legal specialist at law firm Mattos Filho. Pimentel, who also served as chief of the environmental agency in the state of Sao Paulo, started working with Samarco right after the 2015 accident in Mariana, Minas Gerais, which killed 19 people.

She was key to helping the company get an initial license in December. But the efforts became delayed in January when Vale suffered an even worse disaster at one of its mines in Brumadinho, also in the Minas Gerais state. The Brumadinho dam burst killed 248 people with another 40 missing and presumed dead, prompting the state to pass new regulations to avoid future accidents.

“We decided to keep the bond after meeting with her in April,” said Ian McCall, who oversees $190-million in emerging-market assets at First Geneva Capital Partners, referring to Samarco’s $2.2-billion in defaulted bonds maturing between 2022 and 2024. “It was quite a pleasant surprise to meet her, understand her background and the job she has been doing for years.”

As part of the regulatory negotiations, the miner is revising its business plan to move 80% of its production to dry processing. The new plan will be put up for shareholder approval in August, while the regulatory go-ahead may come before the Mining Expo, the largest in Latin America, that will take place in September 9 to 12 in Belo Horizonte, Minas Gerais’s capital, one of the people said.