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 $42.06. In morning trade on Monday, shares are swapping hands for $42.72 apiece, up 1.56%.
For some context, the ASX 200 is up 0.77% at this same time.
This comes amid an uptick in the iron ore price, and as BHP reports it is negotiating a settlement proposal of approximately $170 billion Brazilian real (AU$44.2 billion). That proposed settlement would go to the people, communities and environment impacted by the 2015 Samarco Fundao iron ore tailings dam collapse in Brazil.
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 widespread environmental damage. It also put significant pressure on the BHP share price at the time.
Here's what's happening.
Settlement offer lifts BHP share price
BHP and Vale have been actively working on remediation for the disaster via Fundacao Renova.
"BHP Brasil is fully committed to supporting the extensive ongoing remediation and compensation efforts in Brazil through the Fundacao Renova," BHP stated last year.
As at 30 September, Renova was said to have spent US$7.9 billion on remediation measures.
In Sunday's media release, BHP stressed that negotiations between the parties – including Vale and the Federal and local Brazilian governments — were ongoing, and no final agreement had been reached.
A final agreement could offer a boost to the BHP share price by putting the long-running legal battles to rest in Brazil. The ASX 200 miner noted:
The final settlement is expected to provide reparation for the impacts of the dam failure and resolve the Federal Public Prosecution Office claim and all existing claims by the Public Authorities in relation to the dam failure.
If the proposal goes through, impacted individuals and small businesses will be compensated R$30,000 per person. Eligible individual water damage claims will be compensated R$13,000 per person.
The agreement also provides R$8 billion to eligible indigenous and traditional communities to decide how to address the collective impacts to their communities.
Not out of the legal woods yet
The BHP share price could still see some volatility ahead regardless of the outcome of the new settlement negotiations in Brazil.
As the ASX 200 miner notes (take a breath, this is all one sentence!):
A final settlement would not resolve the Australian class action complaint, United Kingdom group action complaint, the group action claim brought against certain Vale and Samarco entities in the Netherlands, criminal charges against Samarco, BHP Brasil, Vale and certain individuals, civil public actions commenced by private associations, including the civil public action concerning the use of Tanfloc for water treatment, trailing litigation from individuals (among others) and future or unknown claims which may arise from new information or damages in connection with the dam failure.
The trial in the UK begins today, 21 October.
BHP said it would continue to defend the UK action, which it believed was unnecessary because it duplicated matters already covered by the ongoing reparation work and legal proceedings in Brazil.
The BHP share price is down 1.5% over 12 months.
