FMG Fortescue Ltd

MELBOURNE, Australia—Shares of resources giant BHP Billiton Ltd. fell close to a decade low on Friday as a drop in commodity prices overnight compounded investor worries about the fallout from a dam-burst at its jointly-owned Brazilian iron-ore mine operation last week which killed nine people.

BHP's Sydney-listed shares slipped to levels last seen in late 2005, when China's burgeoning demand for minerals was starting to raise prices of both commodities and miners' shares.

BHP's shares have slumped 13% since millions of tons of mining waste burst from a dam at the Samarco operation on Nov. 5, adding to a recent investor antipathy toward mining stocks as metals prices have fallen. Mining stocks broadly were hit hard in London trading on Thursday as crude-oil prices dropped to their lowest levels since August and prices for copper and other metals fell. BHP, which produces oil and gas as well as mining copper, iron ore and other metals, saw its London-listed shares fall 5% on Thursday.

The company on Friday said mine tailings—a mix of water and iron-ore waste—now extended 440 kilometers (273 miles) downstream through remote mountain valleys from the mine site in Brazil's Minas Gerais state. Local authorities have advised that 637 people have been evacuated and 11 communities affected. Nineteen people remain missing.

A day earlier, Brazilian President Dilma Rousseff said the mine's operator, Samarco Mineraç ã o SA, and owners BHP and local mining company Vale SA broke federal environmental and other laws. A statement from BHP on Friday didn't reference Ms. Rousseff's remarks, but said it and Vale had pledged to establish an emergency fund for affected communities and rebuilding work.

BHP Chief Executive Andrew Mackenzie flew to the Brazilian mine this week, where part of a three-tiered dam failed, even as the death toll continued to rise. Operations at the site have been halted and Samarco's operating license in the country has been suspended. Employees are on paid leave and BHP, Vale and Samarco representatives are meeting with insurers in Brazil, BHP said Friday.

"Let me be very clear, we are 100% committed to do everything we can do to support Samarco and make this right," Mr. Mackenzie said during a media conference while in Brazil.

In early trading Friday, BHP's shares slipped below 20 Australian dollars (US$14.27) a share but recovered modestly after BHP released an update on the mining accident. If the stock closes at current levels, it would be its lowest end-of-day level since early 2005, according to FactSet.

In addition, BHP on Thursday said it had lodged an application with the Supreme Court in Australia's eastern Queensland disputing the state government's claim for A$186 million in unpaid royalties and A$102 million in interest based on an assessment of the company's calculations for the value of its coal and the use of its Singapore marketing office between July 2005 and December 2012. BHP said its coal venture had paid about A$2.4 billion in royalties to the state during that time.

BHP's shares were recently 1.8% lower at A$20.24 in Sydney. Other mining stocks were lower, with Rio Tinto Ltd. down 2.1% and Fortescue Metals Group Ltd. down 3.6%.

Write to Robb M. Stewart at robb.stewart@wsj.com

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(END) Dow Jones Newswires

November 12, 2015 23:55 ET (04:55 GMT)

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