BHP Billiton has announced that the Samarco iron-ore operation in Brazil is unlikely to reopen this year as it may not be able to obtain necessary approvals to restart its operations.

Operations are expected to resume only when all regulatory approvals are in place and accepted by the relevant authorities and communities.

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Samarco has started negotiations with employees to adjust the workforce in line with expected production levels.

This may see around 40% of the workforce choose to accept voluntary redundancy.

"There is still much to be done to rebuild and restore."

BHP also provided an update on the recovery and response effort following the breach of Samarco’s Fundão tailings dam and Santarém water dam at its iron ore operations in Minas Gerais, Brazil, in November last year. At least 17 people are believed to have died as a result of the burst dam.

BHP Billiton chief commercial officer Dean Dalla Valle said: “Samarco employees and members of affected communities have been working incredibly hard to deliver the remediation projects in the framework agreement and over 90% of the projects have been initiated.

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“There is still much to be done to rebuild and restore but we believe that working with Vale, Samarco and the Brazilian authorities we will be able to deliver on the commitments under the agreement and we will do what’s right."

The Federal Court of Appeal in Brasilia ratified the framework agreement on 05 May this year between Samarco Mineração, Vale, BHP Billiton Brasil and the Federal Government of Brazil, the States of Espirito Santo and Minas Gerais and certain other public authorities to restore the environment and communities affected by the incident.

The agreement mandates community involvement in the development of remediation and compensation programmes. It requires access to remedy for affected people through a local level grievance mechanism.

BHP said 90% of the 41 programmes prescribed by the agreement have been initiated.