Insurers have paid more than $500 million for flood damage and disruption at coal mines in Queensland’s Bowen Basin owned by BHP Billiton and its partners Mitsubishi and Mitsui.

The payout is believed to be the largest out-of-court settlement of its type in the world.

insuranceNEWS.com.au reported last month that the settlement in June following negotiations between insurers and mine owners in Singapore resulted in a payout of at least $350 million.

More detail on the settlement came to light last week when BHP Billiton released its annual results, listing a $US300 million ($287.36 million) settlement of an insurance claim as an exceptional item.

BHP’s profit report says that during 2008 “extreme weather across the central Queensland coalfields affected production from the BHP Billiton Mitsubishi Alliance (BMA) and BHP Billiton Mitsui Coal (BMC) operations”.

“The group settled insurance claims in respect of the lost production and insurance claim income of $US300 million ($287.36 million) was recognised in the financial year.”

Mitsui and Mitsubishi have not yet detailed their payouts. But given that BMA is a 50/50 joint venture and BMC, which has coal output of only 10% of BMA’s, is 80% BHP-owned, the total payout is likely to have been nearly double what BHP received, putting it well above $500 million.

While BHP refers to business interruption in its press release, industry insiders believe the claim covered damage to equipment and remediation as well. 

Following the 2008 floods BHP moved to self-insurance for its share of the Bowen Basin mines, using its Guernsey-based captive Stein Insurance to provide cover.