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BHP Billiton (ASX:BHP) or the BHP group, one of the worldâs largest iron ore producer, jolted over a $5 billion lawsuit in England filed against the company by a Law Firm- SPG Law, concerning the Samarco dam failure in Brazil. The company is now facing a US$5 billion claim for the damages caused by the dam failure, and SPG law is representing claims of 235,000 Brazilian individuals and organizations.
Samarco was a joint venture between the worldâs top significant iron ore miners, i.e., Vale and BHP, which constructed the Fundao tailings dam in 2015, the dam collapse killed around 19 people and left a trail of destruction for hundreds of kilometres in the states of Minas Gerais and Espirito Santo.
The Samarco venture, which was once the worldâs second-largest iron-ore pellet operations, between the two behemoth iron ore producers, was closed after the incident. Now, the law firm has filed a case against BHP and mentioned that despite repeated warnings from independent experts and safety advisers regarding recommended safety improvements, the company failed to act upon it. As a result of such negligence, Brazil marked the worst ever environmental disaster.
SPG mentioned that the concern of decline in revenue driven by the fall in the market price of iron ore led the company to take a risk. The company ramped up the production, which in turn, led the company to turn a blind eye to dangers that ultimately claimed 19 lives and ruined communities.
BHP in its defence released an announcement and mentioned that the company is in the knowhow of the media reports related to the Samarco dam failure on 5th November 2015. Furthermore, in the same announcement made public by the company today, BHP mentioned that the group had been served with the legal proceedings filed against the company in the court of Liverpool, and the company intends to defend the claim.
The company recently released its quarterly update.
The shares of the company plunged on the Australian Stock Exchange over the news. The shares started the dayâs session at A$37.130, down by approx. 0.35%, the prices soon plunged to make a low of A$36.770 (as on 8th May 2019, AEST: 01:07 PM), down by almost 1.43%.
The share of the company is currently trading around A$36.920 (as on 8th May 2019, AEST: 02:01 PM), down by around 1.019%, as compared to its previous close.
Stock Price Performance Metrics:
The share of the company returned a rate of 15.51% on YTD basis (as on 7th May Closing). The yearly rate of return on the shares of the company stands at 21.76%. The previous month upside in the iron ore prices boosted the share prices of the company, and the 6-month rate of return stands at 16.51%.
However, the recent drop in the value of the shares led the company to deliver a rate of return of -6.49% on a monthly basis and a return of -0.48% over the last five days.
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