(Updates share price)
By Jamie McGeever and Alberto Alerigi
BRASILIA/SAO PAULO, Jan 3 (Reuters) - Brazilian petrochemical producer Braskem SA has agreed to a 2.7 billion reais ($667 million) settlement with federal and state authorities in the northeastern state of Alagoas to cover damage caused by a mining project in the area.
Preferred shares in the company surged as much as 8% on the news to a five-month high, on track for their biggest one-day gain since May 20 as investors breathed a sigh of relief that the amount of damages to be paid was not higher.
According to a securities filing on Friday, 1.7 billion reais is for the financial compensation and relocation of some 17,000 people in the state capital Maceio, and 1 billion reais will be used to close the company’s rock salt wells in the city.
Prosecutors had alleged that the mine had caused serious damage to real estate in the city and cracks in the ground, which was backed up by a report by the Brazilian geological service in May. Braskem disputed this.
When Braskem proposed to the National Mining Agency (ANM) in November the steps it would take to close the Maceio salt wells, it estimated that around 400 buildings and 1,500 people would be affected, while the city of Maceio’s estimates were more than 9,600 properties and over 40,000 people.
In Friday’s securities filing, Braskem also said the authorities accepted its request to free up 3.7 billion reais that had been frozen since June.
Braskem’s preferred shares rose as much as 8% to 32.81 reais, the highest in five months, strongly outperforming the wider Bovespa index of leading Brazilian shares which spent most of Friday trading between 0.5% and 1% lower. ($1 = 4.06 reais) (Reporting by Jamie McGeever and Alberto Alerigi; Editing by Alex Richardson, Nick Zieminski and Jonathan Oatis)
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January 03, 2020 at 08:34PM
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UPDATE 2-Brazil's Braskem takes 2.7 bln reais charge for salt mining project - Reuters
"mining" - Google News
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