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BHP and Vale Haunted by the Ghosts of Deepwater


There will be no quick or cheap escape for BHP Billiton (BHP) from the hole that it has dug itself in Brazil.

Shares in the world's largest mining company tumbled more than 9% on the Australian exchange on Wednesday after a Brazilian federal prosecutor sued the Anglo-Australian group and Brazil's Vale (VALE - Get Report) for 155 billion reais ($43.6 billion) following last year's disaster at their Samarco joint venture.

The claim, one of the largest civil lawsuits in Brazilian history, relates to the November collapse of a tailings dam and a resulting wave of mud that destroyed the town of Bento Rodrigues, killed at least 17 people and flooded more than 400 miles of the Rio Doce River with mining waste.

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In the wake of the disaster BHP and Vale cut a notably quick compensation deal with the Brazilian government that they, and many investors, hoped would limit the financial impact of the disaster. In March, BHP said its share of that deal would be limited to a maximum $880 million, a sum it would pay in...