Australian mining giant BHP on Monday said a Brazilian court had approved the reorganisation plan for its Samarco Mineracao joint venture, clearing the path for the cash-strapped Brazilian miner to move ahead with a $3.7 billion debt-restructuring with its creditors.

On Sept. 1, the Second Business Court of Belo Horizonte, State of Minas Gerais, formalised the restructuring plan of Samarco as part of the ongoing proceedings, BHP said.

The reorganisation plan for Samarco, which is 50% owned by BHP and 50% by Vale, allows for the Brazilian miner's existing financial debt to be exchanged for up to $3.7 billion of long-term unsecured debt, BHP said.

"The new long-term debt will remain non-recourse to Samarco's shareholders, BHP Brasil and Vale," BHP said in a statement.

The planned restructuring, which also includes payments to employees and suppliers, is projected to conclude in the first half of fiscal 2024, the company said.

(Reporting by Roushni Nair in Bengaluru; Editing by Paul Simao and Rosalba O'Brien)