BHP to take extra $1.3bn charge on Samarco disaster

BHP Billiton said the Samarco dam disaster in Brazil would hit full year profits by an extra $1.1bn-$1.3bn.

In a statement, the company said the charge was equivalent to a 50 per cent share of the estimate of remediation and reparation costs under a framework agreement with the Brazilian government.

“The associated income statement charge will be recognised as an exceptional item in the June 2016 half-year, together with direct costs of approximately $100 million (post tax),” the company said.

A tailings dam at the Brazilian joint venture collapsed last November, killing 19 people and left 700 homeless.

The final cost to BHP and its partner Vale could be much larger. Although an agreement between the companies and the government has been reached, a Brazilian court has put the deal on hold while a $6bn public claim is considered.