BHP share price marching higher amid legal cost sharing agreement with Vale

The BHP Group Ltd (ASX: BHP) share price is marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining stock closed Friday trading for $43.40. In morning trade on Monday, shares are changing hands for $43.78 apiece, up 0.8%.

For some context, the ASX 200 is also up 0.76% at this same time.

This comes after the miner released an update on the legal group action proceedings in the United Kingdom related to the 2015 Samarco Fundao iron ore tailings dam collapse in Brazil.

Here’s what’s happening.

Legal proceedings

The BHP share price is marching higher after the miner advised it had entered into an agreement with Vale on the ongoing legal proceedings in the United Kingdom involving more than 600,000 claimants.

The Fundao Dam was owned and operated by Samarco, a non-operated 50/50 joint venture between BHP Brasil and Vale.

The tailings dam collapse killed 19 people and caused massive environmental damage. It also heaped pressure on the BHP share price at the time.

“BHP Brasil is fully committed to supporting the extensive ongoing remediation and compensation efforts in Brazil through the Fundacao Renova,” the miner stated last year.

Fundacao Renova is a not-for-profit, private foundation. It was established after the dam collapse to implement 42 remediation and compensatory programs in Brazil.

Today, the ASX 200 miner reiterated:

BHP Brasil remains committed to continue supporting the local remediation efforts in Brazil through the Renova Foundation. Those efforts have already provided approximately US$3.5 billion in compensation and direct financial aid in relation to the dam failure to approximately 430,000 people to 31 May 2024.

However, neither BHP nor Vale believes the court proceedings against them in the UK should continue.

“BHP does not consider that it is liable to the claimants in the English Proceedings and will continue to defend the English Proceedings,” the miner stated.

BHP added:

BHP believes the English Proceedings are unnecessary because they duplicate matters already covered by the existing and ongoing work of the Renova Foundation and legal proceedings in Brazil.

In March this year, a new claim was filed against Vale and the Dutch subsidiary of Samarco in the Netherlands on behalf of approximately 78,000 Brazilian claimants for compensation relating to the dam collapse. BHP is not a defendant in the Netherlands case.

BHP share price gains on Vale agreement

Today, the BHP share price is lifting after the company said it had entered into an agreement with Vale that would see each of them pay half of any potential payouts in the English Proceedings, the Netherlands Proceedings and other proceedings in Brazil, without any admission of liability for these proceedings.

Both miners already contribute 50% to the funding of the Renova Foundation.

BHP brought a contribution claim against Vale in December 2022 because the English Proceedings were not brought against Vale. The ASX 200 miner said it would now withdraw that contribution claim against Vale in light of the new agreement.

The BHP share price is down 3% over 12 months.

The post BHP share price marching higher amid legal cost sharing agreement with Vale appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.