BHP Billiton share price: Group faces lawsuit in Australia over Brazil dam disaster

BHP Billiton share price: Group faces lawsuit in Australia over Brazil dam disaster
Written by:
Alice Young
23rd July 2018
Updated: 11th March 2020

BHP Billiton (LON:BLT) is facing an Australian  class action in relation to the Samarco dam failure, the blue-chip group has said. News of the lawsuit comes after the company and Vale recently signed a deal with Brazilian authorities to settle a BRL20 billion (around £4 billion) civil claim over the disaster which killed 19 people in 2015.

BHP Billiton’s share price has slipped marginally lower in London in today’s session, having given up 0.41 percent to 1,606.80p as of 10:25 BST. The decline is largely in line with losses in the broader UK market, with the benchmark FTSE 100 index currently standing 0.32 percent lower at 7,654.27 points. The group’s shares have added more than 23 percent to their value over the past year, as compared with about a 2.6-percent gain in the Footsie.

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BHP faces lawsuit

BHP Billiton announced in a short statement this morning that it had noted media reports today concerning the Australian class action in relation to the Samarco dam failure, confirming that it had been served with a class action proceeding filed in the Federal Court of Australia in Victoria.

“BHP intends to defend the claim,” the blue-chip miner said in the statement. The BBC reports that more than  3,000 investors have signed up to the lawsuit, with the claim alleging that the group had  failed to disclose the risk of the Samarco dam’s failure to the stock market, and misled investors over the company’s safety guarantees. The action from Australian law firm Phi Finney McDonald will seek to recover shareholder losses.

“Given the share price fall and the high volumes of shares traded, we believe it a very significant claim,” principal lawyer Brett Spiegel told the BBC.

Analysts on miner

Cfra, which sees BHP Billiton as a ‘neutral,’ set a price target of 1,700p on the shares last week, while Deutsche Bank continues to see the company as a ‘buy,’ without specifying a valuation on the stock. According to MarketBeat, the Anglo-Australian miner currently has a consensus ‘hold’ rating and an average price target of 1,677.44p.

As of 10:44 BST, Monday, 23 July, BHP Billiton plc share price is 1,607.20p.

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