BHP, Vale Samarco JV files for Brazil bankruptcy protection

RIO DE JANEIRO (Reuters) – Samarco Mineracao SA, a joint venture between Brazilian miner Vale SA and BHP Group Ltd, has filed for bankruptcy protection to prevent creditors’ claims from affecting its operations, Vale said in a Friday securities filing.

The collapse of a dam at the Samarco mine complex in 2015 killed 19 people and severely polluted the Doce River with mining waste, one of Brazil’s worst environmental disasters. The facility, which resumed production in December, is the focus of significant litigation from bondholders holding nearly $5 billion in debt.

“The (judicial reorganization) filing is necessary to prevent legal actions already underway … from affecting Samarco’s ability to produce, ship, receive for its exportations and to fund the normal course of its activities,” the company said.

Vale said the bankruptcy protection filing would not impact Samarco’s ability to pay reparations to those affected by the 2015 dam burst. It said out-of-court negotiations with creditors had slowly broken down over time.

The in-court reorganization request, filed in the state of Minas Gerais, is roughly analogous to a Chapter 11 bankruptcy filing in the United States.

Samarco has $4.7 billion of financial debt from non-related parties, Vale said. In the years following the Samarco disaster, Samarco had negotiated with creditors to reach a restructuring agreement. However, those talks slowed in 2019 after changes in dam regulations in Brazil, which materially affected operations at Samarco, Vale said.

In 2019, another dam burst at a Vale mine in Brazil, killing some 270 people and prompting a tightening of the rules governing mining damns.

A significant portion of the debt is now held by “investors active in the distressed assets market,” rather than the original bondholders at the time of the disaster, Vale said.

Reporting by Gram Slattery; Editing by Christian Plumb and Will Dunham

Petrobras CEO resisting pressure from Bolsonaro to resign: Sources

(Reuters) – The chief executive of Brazil’s state-led oil company Petrobras is resisting pressure from President Jair Bolsonaro to resign following tensions over rising fuel prices, two sources with direct knowledge of the matter told Reuters.

Roberto Castello Branco was appointed CEO of Petroleo Brasileiro SA, as the state-controlled firm is known, when Bolsonaro took office at the start of 2019.

While the president has expressed sympathy for truckers threatening to strike over higher diesel prices, Castello Branco has said their complaints are not the company’s problem and insisted that Petrobras will set prices independently of political pressure.

Brazil ‘isolated’ by silence over Biden win

Brazil’s President Jair Bolsonaro has faced a barrage of criticism from the media for his failure to congratulate Joe Biden on his victory in the US elections. Prominent commentators said this left the right-wing Brazilian leader “isolated” at home and abroad.

“Isolated in Brazil and in the world, Bolsonaro maintains silence about the USA,” Brazilian news website UOL said. In the months leading up to US election, Brazilian media had widely reported on Bolsonaro’s open support for President Donald Trump.

Daily Folha de Sao Paulo noted that Bolsonaro was accompanied by the leaders of Russia, China and Mexico in not formally congratulating Biden, but it said that the other three presidents “at least presented justifications”, while Bolsonaro’s silence was complete so far.

However, Vice-President Hamilton Mourao said he believed the president was waiting for what he called the post-election “imbroglio” (a fancy word that means “a confusing situation”) in the US to end before taking a position. This “imbroglio” involved “discussion, if there were false votes, or if there weren’t false votes”, Mourao was reported to have said.

Brazilian news website G1 reported that “political advisers and also military members of the government” were recommending that Bolsonaro “recognise Joe Biden’s victory as soon as possible”. “The worry is, increasingly, that Brazil might be left isolated in international diplomacy,” the website said.