Last week, we here at the MetalMiner Week in Review told you about how BHP Billiton CEO Andrew Mackenzie immediately went to Brazil to, essentially, say “I’m sorry” about the Samarco iron ore mine disaster that has left 11 dead and more missing.
BHP Chairman Jac Nasser has since doubled down and said the company has already committed $363 million to rebuild following the tragedy. The “deeply sorry” strategy shows that BHP is not only committed to rebuilding, but wants to make amends for the damage its failed dam has caused and wants to continue to be a part of iron ore mining in Brazil.
That is not the tactic being taken, however, by BHP’s joint venture partner in the Samarco mine. Vale SA is a Brazilian company which knows it will likely continue to work on other projects there even if the Samarco site never reopens. So it’s not really a surprise that rather than try the “we’re sorry” technique of its JV partner, Vale is playing the “sorry, we’re already tapped out” card.
A common move made while passing the check after a big dinner, the “tapped out” card does not seem like the way for ANYBODY involved in this tragedy to go. Vale says the costs of remediating the disaster have already exceeded the insurance cap for civil damages in the jurisdiction involved. This might be true, considering Vale and BHP have already paid 250 million Brazilian reals ($260 million) in fines, plus the cost of cleanup and lost stock value.
In a word, though, so what? There are still entire towns to be rebuilt and lives to put back together. BHP’s approach is likely to engender more good will among the locals and give them a better chance to fix the mistakes of the past.
Vale may not even want it’s 50% stake in Samarco anymore and this could be a way to exit the project and leave BHP holding the bag. State prosecutors are also considering whether to pursue criminal charges.
Brazilian President Dilma Rousseff said the country was “committed to blame those who are responsible.”
Vale should consider following its JV partner’s lead.