The BHP Group Ltd (ASX: BHP) share price is down more than 1% after the Samarco English High Court decision.
BHP is one of the world’s largest miners with exposure to iron ore, copper and coal. Samarco is a Brazilian mining joint venture between BHP and Brazilian miner Vale.
Samarco UK court decision
BHP announced today that the English High Court has found BHP is liable under Brazilian law for the 2025 Fundao dam failure. BHP says that any assessment of damages (compensation) will be determined in future trials which are expected in 2028 or 2029.
The ASX mining share said it intends to appeal the decision and defend the case in the UK.
BHP noted that it has already supported extensive remediation and compensation over the last decade. Last year, BHP, Vale and Samarco announced a US$32 billion agreement with Brazilian public authorities and lawyers for a “full and final” settlement of the key claims in Brazil for the dam failure.
The miner said that it has already compensated more than 610,000 people, including 240,000 claimants from the UK law case, who have “provided releases for related claims”.
The releases “should reduce the size and value of the claims” of the UK case, according to BHP.
BHP then said it thinks the UK law action is “duplicative of remediation and compensation that has already occurred in Brazil” or what’s available in the Brazil agreement.
How much is the compensation?
The ASX mining giant said that expected cash outflows related to Samarco are still largely in line with the US$2.2 billion for FY26 and US$0.5 billion for FY27 which were included in the BHP FY25 result.
BHP also said that it has already spent US$1 billion to date in FY26.
Since 2015, BHP Brasil, Vale and Samarco have provided US$13.4 billion for reparation and compensation to affected people and to public authorities in Brazil. So far, US$6.3 billion in compensation and financial aid has been paid.
BHP, BHP Brasil and Vale entered into an agreement in July 2024 where BHP and Vale agreed to each pay 50% of any amounts payable to the claimants in the UK case and the separate Dutch case.
Final thoughts on the BHP share price
Subject to BHP’s appeal, a second stage trial will decide whether losses claimed by the claimants were caused by the dam failure. The trial is scheduled for October 2026 to March 2027.
A stage 3 trial may also be required for claimants to prove their individual damages before BHP is required to make a payment to them. The third trial is unlikely to happen before 2028.
While the market has seemingly reacted negatively to the news, it isn’t a big fall. BHP has largely accounted for the compensation in its financials, so this isn’t a significant new development for the ASX mining share.
I wouldn’t buy or sell BHP shares just on this news. It’s not trading at a cheap valuation right now, so I’d look at other ASX dividend shares and wait for a cheaper BHP share price.
