BHP faces UK contempt charge for funding case over Brazil dam collapse

LONDON, June 26 (Reuters) - BHP faces a full contempt of court hearing in Britain for funding litigation to try to prevent some Brazilian municipalities suing the mining giant over one of Brazil's worst environmental disasters, London's High Court ruled on Thursday.

Thursday's ruling is the latest development in long-running litigation over the collapse in 2015 of the Mariana dam in southeastern Brazil that was owned and operated by BHP and Vale's Samarco joint venture.

Judge Adam Constable said it was arguable that BHP, the world's biggest miner by market value, funded Brazilian litigation to stop the municipalities suing in London "with the purpose ... of interfering with the administration of justice".

It is not yet known when the contempt hearing will take place.

BHP, meanwhile, awaits judgment in a London lawsuit that the claimants' lawyers have valued at up to 36 billion pounds ($49.3 billion).

A BHP spokesperson said the ruling did not determine the merits of the contempt application made by the municipalities that it "will continue to vigorously defend".

Lawyers representing the claimants suing BHP – which include more than 600,000 Brazilians, 46 local governments and around 2,000 businesses – welcomed the decision as "a significant step forward in holding BHP to account".

The dam burst and unleashed a wave of toxic sludge that killed 19 people, left thousands homeless, flooded forests, polluted the length of the Doce River – and led to one of the largest lawsuits in English legal history.

The trial began in October and finished in March. Judgment on whether BHP can be held liable for the collapse is pending.

BHP denies liability and says the case duplicates legal proceedings and reparation and repair programs in Brazil. In the trial's first week, Brazil signed a 170 billion reais ($30.6 billion) compensation agreement with BHP, Vale and Samarco. (Reporting by Sam Tobin; editing by Barbara Lewis)