Brazil has launched a BRL 155 billion ($A58 billion) civil suit against BHP Billiton and its partner Vale over the fatal iron ore mine disaster last year.
A short time ago, BHP shares were down 7.8% to $19.10.
The Federal Public Prosecution Service in Brazil says it has started proceedings against Samarco Mineração, the operator of the mine, and the 50/50 joint venture owners Vale and BHP.
The action seeks social, environmental and economic compensation.
The mine’s tailings dam collapsed on November 5, sending a wave of mud downstream, killing 17 people, including five from a village of 12 working at the mine. Two people who were working on the dams are still unaccounted for.
BHP says it’s not yet received formal notice of the latest claim.
“BHP Billiton remains committed to helping Samarco to rebuild the community and restore the environment affected by the failure of the dam,” the company said in a statement to the ASX.
In March, BHP, Vale and Samarco announced an agreement with the Federal Attorney General of Brazil, the States of Espirito Santo and Minas Gerais and other public authorities for the restoration of the environment and communities affected by the dam failure.
This deal for the cleanup sets the costs at around $US2.3 billion over the next six years.
Samarco, Vale and BHP Billiton Brasil will establish a foundation to develop environmental and socio-economic programs to remediate and provide compensation for damage caused by the dam failure.
The agreement is subject to court approval.
“We believe that the agreement (once approved by the Court) provides the long-term remedial and compensation framework for responding to the impact of the Samarco tragedy and the appropriate platform for the parties to work together,” BHP said today.
Analysts calculate impact from the mud slide will strip about 4% from BHP’s profits.
In its latest half year results, BHP recorded a pretax impairment of $US1.188 billion or $US858 million after tax for its investment in the Samarco iron ore mine.
This is made up of $US655 million for the share of losses relating to the Samarco dam failure, $US525 million for carrying value of the investment in Samarco and $US8 million for costs directly paid by BHP Billiton so far.
Business Insider Emails & Alerts
Site highlights each day to your inbox.