BHP Billiton (BHP) Stock Tumbling in Pre-Market Trading on $44 Billion Dam Failure Lawsuit
NEW YORK (TheStreet) -- Shares of BHP Billiton (BHP) - Get Report are falling by 5.51% to $27.94 in pre-market trading on Wednesday morning, as the global resources company, along with Vale (VALE), and their joint venture are slapped with a $44 billion lawsuit relating to the dam disaster in Brazil last November.
Federal prosecutors in Brazil filed a civil lawsuit on Tuesday demanding that the companies responsible pay 155 billion reais or $43.55 billion for cleanup and remediation, the Wall Street Journal reports.
If a judge upholds the lawsuit it will require that Vale, BHP Billiton and their joint venture Samarco Mineração pay an initial 7.7 billion reais to an independent fund that is responsible for cleaning up after the November 5 dam collapse.
"Based on preliminary studies, the human, economic and socio-environmental impacts caused by the break of the Fundão dam are at least equivalent to those verified in the Gulf of Mexico," federal prosecutors said in statement, the Journal added. "It doesn't seem technically or morally credible that...the human, cultural or environmental value of Brazil should be inferior to that of other countries."
The dam collapse, which may be Brazil's worst ever environmental disaster, released a flow of muck that killed 19 people, destroyed villages and polluted over 400 miles of rivers before making its way to the Atlantic ocean a few weeks later.
Shares of Vale are down by 4.41% to $4.98 this morning.
