PERTH (miningweekly.com) – Diversified major BHP Billiton's share price fell by 9.4% on Wednesday after it announced that the Brazilian Federal Public Prosecution Service had launched a A$43-billion legal claim against it and joint venture (JV) partner Vale following a 2015 tailings dam failure at the Samarco iron-ore project, which claimed the lives of 19 people.
BHP told shareholders on Wednesday that while the company had not received a formal notice of the claim, it was understood it related to social, environmental and economic compensation for the failure of a tailings dam at the Samarco project.
In March, the JV partners entered into an agreement with the Federal Attorney General of Brazil, the states of Espirito Santo and Minas Gerais, as well as other public authorities for the restoration of the environment and communities affected by the dam failure.
Samarco, Vale and BHP had agreed to establish a foundation to undertake environmental and socioeconomic programmes to provide compensation for damage caused by the tailings dam failure.
Samarco would contribute $500-million to the foundation this year, less the amount of funds already spent, as well as a further $300-million each in 2017 and 2018.
The amount of yearly contributions between 2019 and 2021 would vary between a minimum of $200-million and a maximum of $400-million, depending on the remediation and compensation projects to be undertaken in each particular year.
The agreement would run for 15 years and would be renewable for periods of one year successively, until all obligations under the agreement had been performed.
The agreement remained subject to court approval.
BHP said on Wednesday that it believed the agreement provided 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.