In the wake of the Vale dam disaster that’s captured so much media attention, it appears that another major mining company is facing charges for their own. BHP Group (NYSE: BBL)(LON: BHP), the world’s largest mining company, is facing what could be the largest group action against a company in English history.
Accused of being “woefully negligent” concerning the 2015 Samarco dam failure in Brazil, BHP is facing a lawsuit filed by SPG Law, which is representing over 235,000 Brazilian individuals and organizations, including utility companies, municipal governments, indigenous tribes, and even the Catholic Church.
The Samarco Dam failure, while only killing 19 people, is considered the worst environmental disaster in Brazilian history as the dam’s collapse ended up severely polluting hundreds of miles of rivers. Since then, thousands of individuals and groups have been affected by the environmental pollution.
The group action describes in meticulous detail the series of failures and bad decisions made by the company over the past several years which led to the disaster. Additionally, SPG Law goes on to claim that BHP was fully aware of the escalating safety concerns concerning the dam’s integrity but chose to ignore them despite repeated warnings from independent experts.
“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,” Tom Goodhead, Partner at SPG Law, said in an emailed statement.
The collapse of the dam left a trail of destruction for hundreds of miles, with pollution even reaching the Atlantic Ocean 400 miles away. The Samarca dam had previously been the world’s second largest iron-ore pellet operation. Since then, the facility has remained closed, signifying a significant loss to global iron outpu.
The story is eerily similar to Vale’s (NYSE: VALE) disaster in January, with the company seemingly ignoring many warning signs about the dam’s stability before it finally exploded. As it turns out Samarca was a joint operation between BHP and Vale, and while the former took most of the blame for the collapse when it occurred, it appears that Vale did not learn their lesson from their involvement with this 2015 disaster.
Shares of BHP have never quite recovered since the Samarco incident, with the company’s stock price plunging from the mid-60s down to $18.71 at its lowest point in 2016. Although the company has slowly recovered over the past three years with its current price at $46.13, it seems unlikely that BHP will return to it’s former highs.
BHP Group Company Profile
BHP is a leading global diversified miner supplying iron ore, copper, oil, gas, and coal. A 2001 dual-listed merger of BHP Limited (now BHP Ltd.) and Billiton PLC (now BHP PLC) created the present-day BHP. Shareholders in each company have equivalent economic and voting rights in BHP as a whole.
Major assets include Pilbara iron ore, Queensland coking coal, Escondida copper, and conventional petroleum assets, principally in Australia and the Gulf of Mexico. Onshore U.S. oil and gas assets are likely to be sold in 2018. – Warrior Trading News