BHP-Vale Brazil mine pays $260 mn for mudslide damage

Rio de Janeiro (AFP) - Brazilian mining firm Samarco pledged Monday to pay $260 million in damages related to a deadly torrent of mud from burst dams that killed at least 10, flattened a village and polluted a river.

Samarco, which is co-owned by mining behemoths BHP-Billiton and Vale, signed a "preliminary commitment" to "guarantee payment for preventive emergency mitigation, repair or compensation measures," the state prosecution service said in a statement.

The November 5 disaster in the southeastern state of Minas Gerais saw a flood of mining waste and muddy water pour from a breached reservoir at Samarco's iron ore mine.

The torrent devastated the local environment, knocked out water supplies in the area, and mostly destroyed the village of Bento Rodrigues. Some 310 miles (500 km) of the River Doce were contaminated.

"We know that the amount of damages could be much greater, but the agreement establishes a firm legal guarantee," prosecutor Carlos Eduardo Ferreira Pinto was quoted as saying in the statement.

A Brazilian court on Friday had already frozen about $78 million from Samarco's accounts for the future payment of potential damages to victims.

Now, the first $130 million must be paid within 10 days and the other half in a month. A government-appointed independent auditor will monitor Samarco's use of the funds, which must "exclusively" target costs related to the tragedy.

On Thursday, Brazilian President Dilma Rousseff announced fines amounting to $67 million -- separate to the damages payouts -- and indicated there would be others.

Australia-based BHP Billiton is the world's largest mining company and Brazil's Vale is the largest iron ore miner.

The overall clean-up cost could top $1 billion, according to Deutsche Bank.

Although the mine is a big employer and Vale is one of Brazil's biggest companies, anger at the sudden catastrophe has been intense, with ordinary people and wildlife the very visible victims.

In Rio, about a hundred people demonstrated outside Vale's headquarters, shouting "Vale, you killed me!"

"We are demonstrating in solidarity with the victims and against the damage from this ecological crime committed by Vale," said an organizer, Marcelo Castanheda. "We don't even know the full extent of it yet."

"We, members of civil society, want to pressure the participants in this tragedy so that they pay."

Protesters smeared mud on their faces and raised placards reading "It was not an accident!"

"I am putting a curse on Vale, it will be bankrupted," said Wuako, a member of the Assurini indigenous tribe.