Australian law firm Phi Finney McDonald plans to file a class-action lawsuit against BHP Billiton Group, arguing the company misled investors over the 2015 dam burst at its Samarco iron ore mine in Brazil that killed 19 people, The Sydney Morning Herald reported May 16.
Operations at Samarco Mineração SA, a joint venture between BHP and Vale SA, have been suspended since the incident.
"There are strong grounds to allege that from at least [Oct. 21, 2013], BHP failed to ensure that appropriate safety measures were in place at the Fundão dam, including a proper system to warn people living downstream of the dam in the event of a dam failure," said Brett Spiegel, a lawyer at Phi Finney.
The law firm added that the shareholders believe the mining major was aware of the risk of an imminent collapse, as well as of the related consequences, according to a separate same-day report by Mining.com.
The legal action would seek losses to shareholders incurred between Nov. 5, 2015, and Nov. 30, 2015, when BHP's share price slumped in the wake of the incident.
The company declined the publication's request for comment.
Samarco Mineração is already working with Brazilian authorities to determine and process the timeline for a final settlement over public civil claims totaling 175 billion Brazilian reais.
Meanwhile, several Samarco Mineração executives are also facing criminal proceedings in a Brazilian court.
As of May 15, US$1 was equivalent to 3.67 Brazilian reais.