(FROM THE WALL STREET JOURNAL 11/28/15) 
   By Paul Kiernan 

RIO DE JANEIRO -- Brazil's government said it is preparing to sue mining giants Vale SA, BHP Billiton Ltd. and their joint venture Samarco Mineracao SA in response to a catastrophic dam failure earlier this month, as Vale acknowledged the presence of toxic elements in a river downstream for the first time.

The civil suit demanding damages of 20 billion Brazilian reais ($5.3 billion) is expected to be filed on Monday, the Attorney General's office said on Friday. The proceeds are intended to create a fund to help recovery efforts in the Rio Doce, a major river that was contaminated with mud and toxic mining waste in the wake of the Nov. 5 collapse of Samarco's dam in Minas Gerais.

As many as 13 people were killed and hundreds displaced as the mud swallowed up entire villages below the dam. An additional 11 are missing.

The lawsuit will represent by far the biggest government response yet to what is widely considered one of Brazil's worst environmental disasters. Environmental agency Ibama had previously announced a fine of 250 million reais, while prosecutors secured a preliminary commitment from the mining companies to create a 1-billion-real emergency fund.

The amount of damages sought, the Attorney General's office said, "is preliminary and could be raised over the judicial process, since the environmental damages of the mud's arrival at the ocean have not yet been calculated."

Vale's admission about the contamination came two days after a United Nations report alleging "high levels of toxic heavy metals and other toxic chemicals" in the Rio Doce and criticizing the mining companies and the Brazilian government for their "defensive" response to the incident.

Vale, BHP Billiton and Samarco all say the tsunami of mud unleashed by the dam break comprised water, mud, iron-oxide and sand, none of which are harmful. But Vania Somavilla, Vale's executive director of human relations, health and safety, sustainability and energy, said the mud may have upset toxic elements settled in the bed of the Rio Doce or along its banks.

"In fact there was lead, arsenic -- not mercury -- detected in some points along the river," Ms. Somavilla said. "When the dam breaks and that stuff washes out the banks of the river, it could have picked up some kind of material that was already present, from the most diverse of origins, but they're all materials present in nature."

She cited a report by the Minas Gerais state Institute of Water Management, or IGAM. The report was dated Nov. 17 but was only published this week, after prosecutors ordered it to do so. A spokesman for IGAM said he didn't know why the institute didn't publish the report earlier.

The 29-page document includes samples collected at 12 points along the Rio Doce between Nov. 7 and Nov. 12, as the mud from Samarco's dam snaked downstream. At various collection points, the report showed record levels of toxic metals.

Brazilian authorities have come under fire for their reaction to the catastrophe. Citing more than 40 water samples between Nov. 14 and 18 taken by federal agencies, the government said Thursday that "there was not an increase in the presence of heavy metals in the water and sediments." In a statement Friday, the government said metals detected in the earlier tests by IGAM had likely settled by the time its samples were collected.

 

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(END) Dow Jones Newswires

November 28, 2015 02:47 ET (07:47 GMT)

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