News World BHP faces $US5 billion claim over dam fail

BHP faces $US5 billion claim over dam fail

A dam burst at a mining waste site, unleashing a deluge of thick, red toxic mud that smothered a village and killed at least 17 people. Photo: Getty
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Anglo-Australian mining giant BHP faces a landmark $US5 billion ($A7.15 billion) damages claim from 235,000 Brazilian individuals and organisations over the country’s worst environmental disaster.

The collapse of the Fundao tailings dam in 2015, which stored mining waste and is owned by the Samarco joint venture between BHP and Brazilian iron ore mining giant Vale, killed 19 and spilled about 40 million cubic metres of toxic sludge into communities, the Rio Doce river and Atlantic Ocean 650km away.

The claim filed in England will be the largest group action to be heard in the country and alleges the mining giant was “woefully negligent” in the run up to the 2015 environmental catastrophe.

It was served on the miner on Tuesday on behalf of 235,000 Brazilian individuals and organisations, including municipal governments, utility companies, indigenous tribes and the Catholic Church, according to law firm SPG Law.

BHP spokesman Neil Burrows said the miner intended to defend itself against the proceedings, brought in the northwestern English city of Liverpool.

Claimants allege BHP, the world’s largest mining company by market value, was aware of rising safety concerns, failed to act on repeated warnings from independent safety experts, increased industrial output of iron ore despite safety concerns and placed the pursuit of profit over human and environmental risk.

Fundao Dam burst BHP
One year after the 2015 Fundao dam burst in Brazil, the country’s worst environmental disaster. Photo: Getty Images

“Driven by concern for declining revenues amidst the falling market price of iron ore, the company took risks, increased production and turned a blind eye to dangers that ultimately claimed lives and destroyed communities,” said Tom Goodhead, a partner at SPG Law, which is representing claimants.

“BHP was woefully negligent in its duty of care and the damages sought are entirely commensurate with the devastation the company has wrought …,” he added.

Brazil charged 22 people in 2016 with offences, including murder, over the Fundao dam’s collapse.

The miners last year settled a 20 billion reais ($US5 billion) civil claim with local authorities to establish a clean-up fund. Other public cases, such as a $US40 billion civil reparation case, are suspended.

BHP, which has separately settled a US investor class action and continues to battle Australian shareholder lawsuits, has rejected all charges against the company, as well as current and former staff.

Although the disaster ranks as Brazil’s worst environmental catastrophe, the collapse of a Vale-operated tailings dam in the town of Brumadinho in January left a higher death toll, currently estimated at 300 people.