Separately, Rio de Janeiro-based Vale said it will book 3.7 billion-real ($1.2 billion) in its second-quarter results to be released later Thursday.
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The Samarco tailings dam in Brazil’s Minas Gerais state collapsed in November previous year, killing at least 19 people and swamping the local environment and river system with a devastating flood of sludge.
“The recognition of the provision demonstrates our support for the long-term recovery of the communities and environment affected by the Samarco tragedy and the belief we have that the Agreement is the most appropriate mechanism to do this”, BHP Billiton chief executive Andrew Mackenzie said in a statement.
The mining giant in February outlined a first-half loss of $US5.67 billion amid a collapse in commodity prices and a massive writedown against its U.S. shale assets.
BHP Billiton (LON:BLT) has this morning announced a provision of up to $1.3 billion in relation to the Samarco dam disaster. BHP and Vale have said they will appeal that decision.
The decline in profit and sales comes as the average iron ore price for delivery at the Chinese port of Tianjin fell 5 percent in the second quarter from the same period a year earlier, according to Thomson Reuters.
The provisions come as hopes fade for a restart at the iron ore mine this year and relate to the Samarco joint venture’s funding obligations under an agreement with Brazilian authorities signed in March.
Work at the mine has been halted since the disaster and BHP and Vale have said operations are unlikely to restart this year.
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BHP shares were up 24.5 cents, or 1.2 per cent, at $20.105 at 1432 AEST.
