BHP to defend investor class action over Samarco disaster

BHP Billiton said it would defend a class action brought by investors over the Samarco dam disaster of 2015 that killed 19 people and devastated communities.

The claim, backed by about 3,000 investors and served in Australia, alleges BHP breached disclosure obligations and engaged in misleading and deceptive conduct, the Sydney Morning Herald reported.

The paper said the claim was backed by investors in the Anglo-Australian miner’s London-listed shares and Australian shares.

In a brief stock exchange statement, BHP did not give details of the claim except to say it was filed in the federal court of Australia in Victoria.

"BHP intends to defend the claim," the FTSE 100 company said.

The disaster occurred at the Samarco iron ore operation in Brazil, a joint venture between BHP and the Brazilian miner Vale. When the dam burst it killed 19 people and flooded three communities leaving people homeless.

In June 2018 BHP paid $158m into a remediation and compensation fund set up in Brazil. BHP and Vale agreed a two-year deadline to settle a £31bn civil claim in Brazil for the disaster.

The investor class action claims there were a series of problems at Samarco in the years before the dam failed and that spending on safety and maintenance was reduced from 2012 until the collapse.

The statement of claim alleges BHP knew about risks of failure at the dam no later than 27 August 2014 and should have alerted the Australian securities regulator to this risk and the “consequential financial risk”, the Sydney Morning Herald said.