Brazil's Samarco stops salary, supplier payments as assets frozen

RIO DE JANEIRO, Nov 28 (Reuters) - Brazilian iron ore miner Samarco has suspended payments to employees and suppliers because its funds have been frozen by courts in the wake of a deadly dam burst and destructive flood of muddy mine waste, the company said in a statement on Saturday (Shenzhen: 002291.SZ - news) .

The company, a joint venture between Australia's BHP Billiton Ltd, the world's largest mining company, and the largest iron ore producer Brazil's Vale SA, has also asked for permission to delay payments to a compensation fund ordered by the government because it cannot access its accounts, the statement said.

In the statement, the company apologized to its employees and suppliers and promised to resume payments as soon as possible.

Brazil's federal and state governments plan to sue Samarco and its owners for 20 billion reais ($5.24 billion) for damages caused by the Nov. 5 burst of a tailings dam, Environment Minister Izabella Teixeira told reporters on Friday.

The dam burst earlier this month unleashed 60 million cubic meters of mud and mine waste that devastated a village, killed at least 13 people and polluted hundreds of kilometers of a major river valley. (Reporting by Jeb Blount; Editing by Marguerita Choy)