BHP Faces Legal Action over Brazil Dam Collapse

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Friday, February 26th, 2016
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BHP Billiton’s chief executive and chairman are named in a lawsuit filed in the United States by investors seeking damages over the fatal Brazilian dam disaster.

A complaint filed in the US District Court in Manhattan accuses the mining giant of overstating its ability to manage safety risks at the Samarco mine, according to a report by Reuters.

In November, a massive spill of waste material at the mine, which is co-owned by BHP and Brazil’s Vale, killed at least 17 people in what was the country’s worst environmental disaster.

The legal action names chief executive Andrew Mackenzie and chairman Jac Nasser among other BHP officials, and claims the company ignored saftey risks and overstated its committment to safety.

The investors are seeking compensation for the resulting sharp fall in the value of BHP’s American Depositary Receipts, which entitle US investors to BHP shares listed in the UK and Australia.

BHP said it has not yet been served with court documents, but disputes the allegations.

“We intend to vigorously defend the matter,” a spokesperson said.

BHP already faces massive fines over the disaster, and the company earlier this week said it is too early to estimate the full financial impact.

BHP Billiton says it has made progress in negotiations with Brazilian authorities for clean-up costs and damages relating to the Samarco dam disaster, but has not yet reached a settlement.

“Significant progress has been made with the negotiations, and we are hopeful that an agreement will be reached,” BHP said in a statement.

Brazil’s federal attorney-general and public authorities in two states that were affected by the disaster, have asked the mining giants to set up a $US5 billion fund for clean-up costs and damages.

Earlier in February, BHP outlined a $US1.12 billion provision in its half year accounts against the Samarco business, but said it was too early to estimate the full financial impact.

BHP’s chief executive Andrew Mackenzie and chairman Jac Nasser have been named in a lawsuit filed in the US by investors seeking damages over the fatal dam disaster.

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