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BHP faces $57 billion suit over mine disaster

BHP Billiton says Brazil’s federal public prosecutor has launched proceedings for $US43 billion ($A57.4 billion) in compensation over last year’s Samarco mine disaster.

May 04, 2016, updated May 04, 2016
The small Brazilian town of Bento  Rodrigues in ruins after the dam collapse. Photo: AP/Felipe Dana

The small Brazilian town of Bento Rodrigues in ruins after the dam collapse. Photo: AP/Felipe Dana

BHP in March said its joint venture with Brazil’s Vale had reached a settlement with authorities to pay up to $US2.3 billion over six years, but that deal has yet to be ratified in court.

In November, the collapsed tailings dam killed 19 people and polluted a major river.

“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 in a statement.

BHP Billiton today said it had not yet received formal notice of the prosecutor’s claim.

The 359-page lawsuit, which is also against the two states affected by the spill and the federal government, is the result of a six-month investigation led by a task force set up after the disaster, prosecutors said in a statement on Tuesday.

Vale said it had not been notified of the suit and was therefore unable to comment.

The total damages, prosecutors said, were calculated based upon the cost of the Deepwater Horizon oil spill in the US. BP’s total pre-tax charge for that spill reached $US53.8 billion.

Prosecutors demanded an initial payment of 7.7 billion reais.

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The civil action is separate from the lawsuit that Samarco, Vale and BHP settled with Brazil’s government in March in which the companies would pay an estimated 20 billion reais for damage caused by the spill.

Federal and state prosecutors did not form part of that settlement.

The settlement itself was criticised by prosecutors, who said it was insufficient and lacked the legal mechanisms to ensure the companies would fulfil their obligations, making it little more than a “letter of intent”.

The roles of the state and federal government were also questioned, with prosecutors accusing the state of Minas Gerais, where the spill occurred, as being guilty of negligence in the permitting and monitoring of the dam.

Reuters/AAP

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