Brazil's Samarco increases investment to expand production

The board of Brazilian iron ore pellet producer Samarco Mineração approved an investment of 1.3bn reais (US$265mn) to double production through 2025.

It will be added to this year’s original investment plan of 1.6bn reais.

Of the 1.3bn reais, around 1bn will be invested next year and the amount includes tailings-related investments such as construction of a new filtering plant and concentrator improvements, a company spokesperson told BNamericas.

Samarco currently operates at 30% of its production capacity, which corresponds to 9Mt of iron ore pellets, through a pelletizing plant and a concentrator.

To double production, the company will use two concentrators and two tailings filtering plants at the Germano complex, in Minas Gerais state, a pipeline and two pelletizing plants at the Ubu complex, in Espírito Santo state.

The company is planning to hire 3,000 people for the expansion plan.

Samarco – a joint venture between Vale and BHP – was involved in one of country's biggest mining disasters in 2015, when a tailings dam collapsed and destroyed two villages in Mariana, Minas Gerais, killing 19 people and causing widespread environmental damage.

As a result, the company halted operations from late 2015 until December 2020.

DISASTER COMPENSATION

Last week stakeholders held a new round of talks in Brasília on compensation for the 2015 mining tragedy.

Representatives of the federal as well as the Minas Gerais and Espírito Santo governments, along with the judiciary and Vale, BHP, Samarco, participated in the talks that are being mediated by the attorney general’s office (AGU).

The aim is to seek a solution to repair the socio-environmental damage caused by the disaster. The talks could lead to a record 126bn-real settlement, according to Minas Gerais officials.

A 2016 agreement between companies and public prosecutors involved 24.4bn reais but opposition to the settlement grew, especially after Vale agreed to pay 37.7bn reais in compensation for a 2019 tailings dam collapse in Brumadinho, also in Minas Gerais.