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4 E&MJ; • JANUARY 2016 www.e-mj.com NEWS-LEADING DEVELOPMENTS On December 18, the 12 th Federal Court of Belo Horizonte handed down decisions on injunctions requested by federal and certain state governments against Samarco, Vale and BHP Billiton Brazil for cleanup costs and damages related to the breach of the Fundão tail- ings storage facility (TSF). The court ordered Samarco to deposit R$2 billion ($519 million) in a court-managed bank account within 30 days—10% of the R$20 billion ($5.2 billion) sought by plaintiffs for the fund. The money must be used to pay for community and environmental rehabilitation. A daily fine of R$1.5 million ($390 million) will be applied to Samarco for noncom- pliance with a court-mandated mid- January deadline. The court also imposed a restriction on existing mining/exploration conces- sions held by Samarco, BHP Billiton Brazil and Vale in Brazil, preventing those concessions from being trans- ferred or sold by the current holders. The court also gave the three compa- nies until February 2 to present a com- prehensive plan for environmental remediation and socioeconomic recov- ery. The judge said if Samarco did not have enough money to pay for the cleanup, the parent companies could be held responsible. Vale has been further implicated in the spill. The company was pumping tailings from its Alegria iron ore mine to the Fundão TSF. The judge ruled that Vale shared responsibility rather than being an indirect polluter, although Vale claimed that less than 5% of the tailings in the Fundão TSF were from the Alegria operation. Meanwhile the death toll from the spill has increased to 17—five civilians and 12 miners working on the Fundão TSF. Mining Majors Cope With Low Commodity Prices Several major mining companies made presentations to investors in the first 10 days of December, with an emphasis on what the companies are doing to cope during the current low commodity price environment and on how operating costs and capital expenditures are being reduced. Asset sales and shutdowns were at the top of the agenda for Anglo American, Freeport-McMoRan and Vale. Newmont focused on production ex- pansions and cost reductions, while Glencore emphasized its debt reduction and capital preservation measures. BHP Billiton's and Rio Tinto's presentations centered on their copper and aluminum businesses, respectively, rather than on company-wide financial analyses. Brief summaries of the individual company presentations follow: Anglo American: Anglo American set out a radical restructuring program to rede- fine the focus of its asset portfolio and create a more resilient business to deliv- er sustainable shareholder returns. Key elements of the program include reduc- tions in the number of operating assets from 55 to about 20 through sales, clo- sures, or placement on care and main- tenance. As a result, the company antic- ipates that its workforce will be reduced from 135,000 to less than 50,000. Apart from placing the Snap Lake diamond mine in Canada on care and maintenance, closure of the Thabazimbi iron ore mine in South Africa, and sale of its phosphates and niobium assets, Anglo American did not list the assets it expects to remove from its operating portfolio. Anglo American's corporate struc- ture will be reorganized into three oper- ating businesses: De Beers; Industrial Metals, including base metals and plat- inum; and Bulk Commodities, including iron ore and coal. The company's London headquarters will be co-located with De Beers in 2017. Anglo American is targeting cost and productivity improvements of $1.1 bil- lion in 2016 and $1 billion in 2017. Capital expenditures are expected to drop from about $4.1 billion in 2015 to about $2.5 billion in 2017. Dividends have been suspended for the second half of 2015 and all of 2016. Freeport-McMoRan: Freeport-McMoRan announced new steps in response to market conditions in addition to those previously announced in late August. The new actions include a full shut- down of the company's Sierrita copper mine in Arizona and adjustments to operating plans at its primary molybde- num mines. An aerial view of the Rio Doce (Doce River) on November 23, which was flooded with mud after a dam owned by Vale SA and BHP Billiton Ltd. burst at an area where the river joins the sea on the coast of Espirito Santo in Regencia village, Brazil. ( Reuters /Ricardo Moraes) Brazilian Court Sets Deadline for Actions Related to Samarco Spill