A promotional sign adorns a stage at a BHP Billiton function in central Sydney August 20, 2013. Australian shares edged 0.1 percent higher on Wednesday morning, as a mixed bag of earnings kept buyers in check with top miner BHP Billiton Ltd sliding after
A promotional sign adorns a stage at a BHP Billiton function in central Sydney August 20, 2013. Australian shares edged 0.1 percent higher on Wednesday morning, as a mixed bag of earnings kept buyers in check with top miner BHP Billiton Ltd sliding after its profits undershot forecasts, though a rebound in the banking sector helped support the market. BHP dropped 2.5 percent after it missed analysts' forecast in its full-year profit late on Tuesday and said it delayed production the $14 billion Canadian potash project. Picture taken August 20, 2013. Reuters/David Gray

Brazilian government has decided to take legal action against miner Samarco and its co-owners BHP Billiton (ASX: BHP) and Vale (NYSE: VALE) for environmental damage caused by the dam disaster in early November.

Both the federal and state governments are suing for compensation of US$5.2 billion (AU$7 billion) for the incident. Officials said that the disaster has caused harm to both aquatic lives and terrestrial lives. The wave of mud spilled into the Doce River on Nov. 5, killing around nine tonnes of fish. The dirty water polluted 850 kilometres of waterways and contaminated the source of drinking water, affecting hundreds of thousands of people in Minas Gerais and Espirito Santo regions. Around 13 people lost their lives in the incident.

Environment Minister Izabella Teixeira said that a lawsuit would be filed against the companies and compensation would be asked to facilitate environmental recovery and aid the victims. She said that the incident caused severe damage to the environment. “It was not a natural disaster. It is a disaster prompted by economic activity, but of a magnitude equivalent to those disasters created by forces of nature,” the minister told a press conference.

Teixeira said on Friday that the company will have to bear the consequences of the incident over the next 10 years with a possibility of the rate of compensation still be increased. “Whatever was lost there is lost forever, the biological chain won’t be reconstructed,” she told reporters.

BHP Billiton and Vale said that they have created a fund to deal with the tragedy. The fund’s amount was not mentioned. The former said that it has not yet received any formal notice about the legal action yet. Last week, the miners said that they would set up a non-profit fund to help authorities clean up the affected areas.

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