Shares in BHP, the world’s biggest mining company, are tanking.
It closed yesterday on the Australian market down 2.75%, lower than the $A20 mark at $A19.81, and well down on this year’s high of $A31.07.
The weakening global commodity outlook has been the key force driving the share price fall but a fatal accident at the Samarco iron ore mine disaster in Brazil, for which the company is making at least $100 million in provisions, has accelerated the sell-off.
On global markets in the past 24 hours the price of iron ore fell about 4.5% to $45.58 a tonne, dragging on the share prices of the big miners.
Rio Tinto was down 2.2% to $47 today on the ASX.
CEO Andrew Mackenzie was in Minas Gerais, Brazil, last week where at least 10 people were killed and 600 have lost their homes.
“I want to re-emphasise that we are deeply sorry to everyone who has and will suffer from this terrible tragedy,” he said.
“But please let me be very clear: we are 100% committed to doing everything we can do to support Samarco as it works to rebuild the local communities and restore the environment.”
The Samarco mine, which is jointly owned by BHP and Vae, has reportedly pledged to pay $366 million in damages.
And analysts expect the disaster will strip about 4% from BHP’s profits and add about $1.5 billion in debt.
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