By PNG correspondent Steve Marshall

Australian mining giant BHP Billiton says it will fight a multi-billion dollar law suit lodged by Papua New Guinea landowners for damage caused by the huge OK Tedi mine operation.

Around 13,000 PNG landowners are seeking a $5 billion payment for environmental damage caused by BHP when it operated the OK Tedi Mine in the Western Province.

BHP opted out of OK Tedi five years ago and donated its 52 per cent share to a trust fund for the region.

It also paid compensation to local landowners to protect its shareholders from future claims.

But lawyer Camillus Narokobi says his clients never agreed to BHP's exit strategy.

"Those that were strong enough to say 'No, this money's not enough', so they're not parties to the agreement," he said.

BHP says it is protected from such claims.