BHP has lost more than 15% in value since news of the disaster at the 50% owned Samarco iron ore mine reached Australia last Friday morning.
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BHP Billiton Plc is engaged in investigation, development, production, processing and marketing of minerals, in respect of iron ore, metallurgical and energy coal, copper, aluminum, manganese, uranium, nickel, silver and potash, and investigation, development, creation and promotion of traditional and unconventional oil and gas.
Rescue workers have scrambled to help victims after tailings from the burst dams flattened homes and vegetation in what’s been called the worst environmental disaster in Minas Gerais history.
Mr Wilkins has assumed it will cost the Samarco partners at least $US1.1 billion to clean up and compensate the local communities.
“We’ve been bemused for a few time at the lack of share price depreciation in light of the deteriorating earnings profile for the group and we’ve been skeptical for many months about the dividend policy of the company, ” said Ben Lyons, a portfolio manager at ATI Asset Management.
The fine has been levied due to the environmental damage caused by the incident, and could be followed by even more penalties from federal and state agencies. Samarco hadn’t implemented an emergency warning system to alert the town below when the accident occurred, he said.
It is still unclear what exactly caused the disaster, with BHP and Vale, co-owner of Samarco, saying it is too early to determine the precise causes.
Ms Hodge said BHP has suffered damage to its reputation.
Vale only released a 5-sentence statement a full day after the disaster, referring questions to Samarco, which is increasingly being viewed by the public as a front for the mine’s true owners.
The dams are run by mining company Samarco, which is owned by two giants in the sector: Vale and BHP Billinton.
A 2013 report by the Minas Gerais University-linked Instituto Pristino, commissioned by the state environment ministry, had warned about the risk of dams bursting and recommended putting in place a plan to monitor the structural integrity more closely and frequently.
Two of the mine’s three dams – the Fundao and the Santarem – failed in the incident, resulting in the toxic flood of mine waste. Both companies now rank BHP at A+, the fifth-highest level.
The moves by federal officials toughen the discourse of a national government that until recently had left much of the response to the disaster in the hands of the state government of Minas Gerais, a global mining hub and site of the tragedy.
BHP’s response to the Samarco news was in stark contrast to Hayward in 2010 who was criticised for downplaying the impact of the Gulf of Mexico spill and for failing to take responsibility.
After its 26% share slump this year, the company offers an 8.7% projected payout yield, according to data compiled by Bloomberg.
BHP Billiton plc now has a consensus rating of “Hold” and a consensus target price of $47.00.
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The folks at BHP Billiton will know what he means.
