Brazil prosecutors seek to force Vale, BHP to pay off Samarcoโ€™s debt -court document

By Carolina Mandl and Marta Nogueira

SAO PAULO / RIO DE JANEIRO (Reuters) - Brazilian prosecutors on Wednesday asked a bankruptcy court to force mining companies Vale SA and BHP Group Ltd to fully pay off 50.7 billion reais ($ 9.47 billion) of debt. its Samarco joint venture, according to a revised court document. by Reuters.

Samarco filed for bankruptcy protection in April as it struggled to restructure its debt, which it defaulted after a dam exploded in a mine in 2015, killing 19 people, releasing a giant torrent of sludge and halting production.

Prosecutors believe that the Samarco co-owners are responsible for the disaster and are seeking a restraining order that forces them to cover their debt, according to the document.

Prosecutors said both controlling shareholders used Samarco for immediate profit amid a boom in iron ore prices, which they said precipitated the dam's collapse.

"They decided to put at risk the lives of the people who lived and worked there, as well as the environment, causing tragic consequences and incalculable damage," they wrote.

Vale said in a securities presentation that he was surprised by the request from prosecutors.

"The request attacks the clear letter of the agreements signed between the parties, of which the MPMG (prosecutors of the state of Minas Gerais) is a signatory, in addition to threatening ongoing discussions and efforts to renegotiate reparation measures for resulting damages de la Fundรฃo dam collapse, "the company said.

BHP said in a statement that filing for bankruptcy protection was the best solution it found to allow Samarco to recover financially.

($ 1 = 5.3543 reais)

(Reporting by Carolina Mandl in Sao Paulo and Marta Nogueira in Rio de Janeiro; Editing by Christian Plumb and Peter Cooney)

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