BHP, the largest Australian mining company, has agreed to pay $110 million to settle a shareholder class action launched following the fatal 2015 collapse of a tailings dam in Brazil.
Melbourne-based BHP has been locked in disputes for nearly a decade over its role in the catastrophic bursting of the Fundao tailings dam, which killed 19 people, spewed millions of tonnes of mine waste into the local waterways and left hundreds homeless.
BHP has warned against the Productivity Commission plan.Credit: Philip Gostelow/Bloomberg
The miner, which jointly owned the site through its 50:50 Samarco joint venture, has spent billions of dollars funding remediation and compensation, but has also been fighting large court cases in Australia and the United Kingdom, brought by people who lost their houses and livelihoods, and shareholders who lost money.
On the eve of a trial due to begin this week, BHP said it had reached an agreement to settle one of the class actions, which had been brought on behalf of tens of thousands of Australian shareholders who incurred losses related to heavy falls in the company’s share price. BHP’s shares plunged 22 per cent in Sydney and 23 per cent in London and Johannesburg in the days after the disaster, wiping out about $25 billion in market value.
“BHP has agreed to pay the applicants $110 million, inclusive of interests and costs,” it said on Tuesday. “BHP expects to recover the majority of the settlement amount from its insurers.”
BHP, which denied the allegations, said the conditional settlement did not constitute an admission of liability.
New houses being built in the Brazilian community of Bento Rodrigues in 2022 following the 2015 collapse of BHP and Vale’s Fundao tailings dam.Credit: Renova Foundation
Law firm Phi Finney McDonald, which jointly led the lawsuit, said the conditional settlement was one of few Australian shareholder class action settlements to exceed $100 million, and was the result of seven years of “hard-fought litigation”.
It said the allegations against BHP, which related to whether it had properly disclosed to investors any knowledge of dam failure risks, had been scheduled to go to trial today.
“After a hard-fought battle that included two High Court appeals, this $110 million settlement is a welcome result for BHP investors wherever they are located,” Phi Finney McDonald principal lawyer Cameron Myers said.
Bento Rodrigues is buried in mud after BHP-Vale’s Samarco dam failure in 2015.Credit: Steve Yolen
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