© Ricardo Moraes/Reuters A general view of Bento Rodigues district, which was covered with mud after a dam owned by Vale and BHP Billiton burst. Photograph:
Nine people are now confirmed dead, and a further 19 remain unaccounted for as a slow-motion environmental catastrophe continues to unfold following the collapse of two mining dams in Brazil's mineral-rich state of Minas Gerais.
Eight days after the town of Bento Rodrigues was swept away by 50m cubic metres of toxic mud, a slow-moving tide of toxic iron-ore residue is oozing downriver, polluting the water supply of hundreds of thousands of residents as it makes its way to the ocean.
Brazil's national water agency, ANA, has warned that the presence of arsenic, zinc, copper and mercury now present in the Rio Doce make the water untreatable for human consumption. Already the lack of oxygen and high temperatures caused by the pollutants has killed off much of the aquatic life along a 500km stretch of the river.
"It is a tragedy of enormous proportions," Marilene Ramos, president of Ibama, the federal environmental agency, said. "We have thousands of hectares of protected areas destroyed and the total extinction of all the biodiversity along this stretch of the river."
The mine and dams are operated by Samarco Mineração SA, a joint venture between the Anglo-Australian mining group BHP Billiton, the world's biggest mining company, and the Brazilian iron ore giant Vale. Shares in BHP Billiton, a FTSE-100 company and therefore a key holding of pension funds around the world - have been battered. Some £8bn has been wiped off the value of the company as its shares in the UK and Australia have slumped by an average of 14%.
For the company - which operates around the world extracting and marketing a range of products from oil, gas, coal and iron ore to copper, silver and uranium - the dam burst comes as mining firms are under pressure. Commodity prices are at a multi-year lows as a result of slowing demand from China. BHP Billiton's UK shares, which closed at 883p last night, were changing hands at almost £20 only 16 months ago.
© Xinhua/Rex Shutterstock A foal is rescued at the site of the dam rupture in the town of Bento Rodrigues.
Ramos stressed that the fine did not include the cost of the clean-up operation, lawsuits and compensation payments. The Brazilian financial magazine Exame, quoting an anonymous government source, said the total cost was likely to run to between R$5bn-R$10bn (US$1.3bn-US$2.6bn).
There will also be operational losses: the Minas Gerais mine produced more than 5% of BHP Billiton's iron ore output and about 3% of the group's earnings. Now Samarco has also been stripped of its mining license.
BHP Billiton was formed in 2001, when Australia's Broken Hill Proprietary merged with South Africa's Billiton. By Thursday the firm, and its partner Vale, had sent senior management to see the damage caused and promised an emergency fund expected to be around $100m. But already there are allegations that there had been warnings about the design of the dam and its safety.
Asked whether she still had confidence in Brazilian mining regulations, Ramos said she believed safety measures needed to be revised in the wake of this disaster. "It cannot be right that in the last 12 years we have had five accidents in the state of Minas Gerais alone," she said.
Early next week the mudslide is expected to reach the Atlantic, with a potentially devastating impact on the fishing communities along the coast of the state of Espírito Santo .
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... or were intentionally compromised to send a message? Hs there been any investigations yet?