The credit rating agency Fitch is downgrading BHP Billiton-Vale joint venture Samarco from CCC to just "C" - an "exceptionally high" credit risk that is the last step before default. 

"Default is imminent or inevitable, or the issuer is in standstill," says the agency on its website, forecasting that Samarco will seek to restructure its outstanding debt with its creditors within the next few months.

Fitch says that Samarco's inability to restart its iron ore mine in Brazil is the main reason for the dowgrade.

"Given the political climate surrounding the company and an inability to gain traction in obtaining the necessary licenses to restart its business, Fitch now believes that the company will not restart operations until the second half of 2017," it predicted.  "Previously, Fitch assumed that Samarco's operations would be able to restart during the first half of 2017."

In November 2015, a dam failure at the Samarco facility in Bento Rodrigues, Brazil sent 60 million cubic meters of iron waste over the town and into the Doce River.  At least 17 people died and two people are still missing.