BHP said it remained committed to working with Samarco and Vale to support the local remediation efforts in Brazil through the Renova Foundation,established in 2016 to progress remediation and compensation programs for the environment and communities affected by the Samarco tragedy. The foundation had spent about $US5.9 billion on remediation and compensation programs to date,BHP said.

Previously,a lower court in the UK had ruled in favour of BHP in determining that the case should not be allowed to proceed in both countries at the same time.

In July,however,the UK’s Court of Appeal overturned that earlier ruling,finding that the overlap between the class action with Brazilian legal proceedings to be “relatively limited”. It also said compensation being paid in Brazil,in numerous instances,appeared inadequate to date.

Analysts on Thursday said the size of a potential class-action settlement posed a risk to BHP’s cash position and ongoing cash flow,which may not yet be factored into market estimates.

“The situation is a tricky one for BHP and is likely to provide a stream of negative headlines over the coming years – or until this is denied by the courts or settled,” RBC Capital Markets analysts Tyler Broda and Kaan Peker said

“But in our opinion there is a limited prospect of this case succeeding,considering that the liabilities would cover the same reparations and compensation that has (and will) be remediated by the Renova Foundation.”

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