The agreement with the Federal Prosecutors’ Office in Brazil outlines the process and timeline for the negotiation of a settlement to the massive claim.

Experts will be appointed to advise the prosecutors in relation to the impacts of the dam failure, any revisions to the existing remediation plan, and for the ongoing assessment and monitoring of the programs.

The conclusions of the experts will be considered in the negotiations of a final settlement, which are expected to be finalised by June 30.

As part of the preliminary agreement, Vale and BHP will provide around $675 million as interim security to support ongoing programs.

The security comprises a $245 million charge over Samarco’s assets, $400 million in insurance bonds and $30 million in liquid assets.

Subject to court approval, the security will replace a $370 million injunction issued in a separate civil claim.

BHP and Vale will also have to advance around $60 million of the funding obligations under the existing framework agreement, which was signed in March.

The prosecutors’ application for a $2.4 billion injunction, the freezing of Samarco’s assets and the criminal proceedings launched against the companies and some individuals will be suspended.

However, if a formal settlement isn’t reached by June 30, the action may be reinstated.

BHP said negotiations over a possible restart of Samarco would continue.

Shares in BHP were down by 0.8% to $A26.47.