BHP Billiton shares have dropped nearly eight per cent on news the iron ore miner could face a near 20-fold increase in compensation over last year's deadly Samarco mine disaster.
BHP on Wednesday said Brazil's federal public prosecutor had launched proceedings for $US43 billion ($A57.4 billion) in social, environmental and economic compensation for the disaster that killed at least 17 people.
That's a huge increase on the $US2.3 billion settlement BHP and joint-venture partner Brazil's Vale agreed with authorities in March.
The news had pushed BHP's share price down $1.62, or 7.81 per cent, to $19.11 by 1127 AEST.
BHP said it stood by the original, smaller, settlement with payments to be made over six years. It has yet to be ratified in court.
"We believe that the agreement (once approved by the court) provides the long-term remedial and compensation framework for responding to the impact of the Samarco tragedy and the appropriate platform for the parties to work together," BHP said in a statement, referring to the $US2.3 billion figure.
BHP said it had not yet received formal notice of the prosecutor's latest claim related to the fatal disaster that polluted a major river and left hundreds homeless.
The move could spark renewed negotiations between Samarco and Brazilian authorities.
"I think BHP, in the longer term, is an incredibly valuable business," Morgans client adviser Bill Chatterton said.
"The claim against BHP apparently is $US43 billion ... (but) I suspect it won't be anything like that after some sensible discussions."
BHP said the agreement reached in March provides a long-term remedial and compensation framework for what has been called Brazil's worst environmental disaster.
The dam collapse at the Samarco mine in Brazil's Minas Gerais state resulted in a massive spill of waste material.
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