Polluter pays: Vale, BHP Billiton to fund clean-up of Brazil river

Mining giants Brazil's Vale and Anglo-Australian BHP Billiton have proposed to create a fund to clean up the Doce River and its tributaries in Brazil, after a massive mine mudslide in the southeastern Brazilian state of Minas Gerais flooded seven villages and left at least 13 dead.

The two said in a joint statement that they would contribute an initial amount - the companies did not specify - to the fund the clean-up with financial support from other private, public and non-governmental organisations to ensure the ''rescue and recuperation effort of the river system for the longer term.''

The companies did not also specify the launch date, but said the fund would be ''put into effect as soon as practicable.''

The move comes after Brazil's government said it will sue BHP Billiton and Vale for $5.2 billion in damages after the deadly collapse of a dam at an iron ore mine sent 60 million cubic meters of mud and mine waste cascading into the Atlantic Ocean and left more than 13 people dead.

Environment minister Izabella Teixeira said the government could demand damages from the companies and the mine operator Samarco, which they co-own, to create a fund of 20 billion reais to pay for environmental recovery and compensation for victims.

''There was a huge impact from an environmental point of view,'' Teixeira said at a press conference in the capital Brasilia. Arsenic and mercury found in river days after Brazil dam burst,

''It is not a natural disaster. It is a disaster prompted by economic activity, but of a magnitude equivalent to those disasters created by forces of nature.''

The lawsuit will be filed on Monday, attorney general Luis Inacio Adams said.

The 5 November disaster occurred when dams holding back water and mine residue at an iron-ore complex operated by the Brazilian company Samarco - a joint venture of Vale and BHP - burst for reasons that remain unclear.

''The fund would focus on supporting the remediation of the river as part of the commitment of Vale, BHP Billiton and Samarco to the aquatic environment following the release of the tailings into the Doce basin,'' the statement read.

Tailings are the waste material that remains after ore processing.

On Wednesday, two United Nations independent experts on the environment and toxic waste called on Brazil's government, Vale and BHP Billiton to ''take immediate action to protect the environment and health of communities at risk of exposure to toxic chemicals.''

BHP Billiton, however, disputed those findings, saying that the tailings that entered the Rio Doce were ''comprised of clay and silt material from the washing and processing of earth containing iron ore, which is naturally abundant in the region.''

It said the tailings were ''chemically stable'' and would ''behave in the environment like normal soils in the catchment.''

Brazilian courts have frozen around 590 million reais (some $158 million) of Samarco's funds in the wake of the avalanche of nearly 62 million cubic meters (2.2 billion cubic feet) of mine residue.

The mudflow traveled for 650 kilometers down the Doce River, one of the largest in southeastern Brazil, before reaching the Atlantic Ocean last Sunday.