The BHP Group Ltd (ASX: BHP) share price is down almost 4% in early trading on Thursday.
The S&P/ASX 200 Index (ASX: XJO) mining giant closed yesterday at $45.56 per share. Shares are currently swapping hands for $43.83 apiece, a drop of 3.8%.
The ASX 200 is also down 1.97% in morning trade.
But the BHP share price looks to be facing additional headwinds from two fronts.
Image source: Getty Images
What's pressuring the BHP share price today?
The first headwinds dragging on the BHP share price are tumbling commodity prices.
Atop a big fall in the oil price, iron ore – BHP's top revenue earner – is down 1.2% to US$130.20 per tonne. And copper, the ASX 200 miner's second biggest revenue earner, dropped 1.1% to US$8,833.50 per tonne.
Much of that looks to be due to increasing global jitters as contagion from the SVB collapse is spreading to Europe, with Credit Suisse shares closing down 24% on the SIX Swiss Exchange.
The BHP share price on the ASX is also heavily influenced by price moves of its US-listed stock. And BHP shares slipped a precipitous 4.7% on the NYSE overnight.
What else are ASX 200 investors considering
Other news that could be dragging on the BHP share price is the expansion of the United Kingdom-based class action lawsuit related to the 2015 Samarco Fundao iron ore tailings dam collapse in Brazil.
The Fundao Dam was owned and operated by Samarco Mineracao. BHP Brasil and Vale each hold a 50% interest in Samarco. The dam's collapse killed 19 people and caused massive environmental damage.
According to an announcement released by BHP this morning, on 25 February, a further claim was filed to add some 500,000 new claimants to the English proceedings, bringing the total number to around 700,000.
Potential compensation was reported as £36 billion (AU$66 billion). Full details of the claims have not yet been received and damages remain unspecified.
BHP said it will defend the UK court action, stating that the class action "duplicate[s] matters already covered by the existing and ongoing work of the Renova Foundation and legal proceedings in Brazil. All claimants have avenues in Brazil to resolve any potential claims…"
BHP and Vale have spent R$28.1 billion (US$5.9 billion) on remediation and compensation programs through the Renova Foundation. As at 31 December, BHP's provision related to the Samarco dam failure was US$3.1 billion.
And the BHP share price could get buffeted by further developments in the English proceedings down the road.
According to the miner:
Given the status of the English Proceedings, it is not possible to provide a range of possible outcomes or a reliable estimate of potential future exposures to BHP in connection with these proceedings.
RBC analysts noted the class action will cause ongoing issues.
"The situation is a tricky one for BHP and is likely to provide a stream of negative headlines over the coming years, or until this is denied by the courts or settled," RBC analysts said (courtesy of The Australian).
However, RBC believes the UK case will likely eventually prove unsuccessful.
"But in our opinion there is a limited prospect of this case succeeding, considering that the liabilities would cover the same reparations and compensation that has (and will) be remediated by the Renova Foundation," the analysts added.
BHP share price snapshot
As you can see in the chart below, the BHP share price has now dipped into the red for 2023, down 5%.
Still, investors who bought six months ago will be sitting on gains of 15%.
