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New Evacuations Ordered at Site of Brazil Mine Disaster

Nov. 11, 2015
Shares in BHP Billiton and Vale have fallen sharply since the disaster, which could cost more than $1 billion to clean up.

MARIANA, Brazil—New evacuations were ordered Wednesday at the scene of Brazil's deadly iron ore mine dam burst as the CEOs of the mining giants that own the operation made a joint visit.

The executives' visit to the Samarco mine in southeastern Brazil followed mounting pressure for answers to the November 5 disaster, which left at least six dead and 21 missing after mud mixed with mining waste poured from two tailings pond dams at the facility.

"Our priority now is to understand the extent of the consequences of the dams' rupture and what we can do more to help," said Andrew Mackenzie, CEO of Australia-based BHP Billiton, the world's biggest mining company, and Murilo Ferreira, CEO of Brazil's Vale, in a statement released in Portuguese.

Fears for the safety of a third dam prompted new evacuations while emergency services made repairs Wednesday. Some 631 people had already been forced from their homes in the accident.

"Families are being relocated so that they are in greater security," a spokesman for the Minas Gerais state government told AFP.

The repairs will "bring a greater measure of stability, mitigating the effects due to the (earlier) breaking and preventing possible future problems," Samarco said in a statement.

Brazil's civil defense authorities called a state of emergency in the Mariana area on Wednesday, opening access to greater federal aid.

On Tuesday, authorities had ordered Samarco to step up its own measures. The joint venture is required to collect and preserve evidence related to the dam failures, making it easier for victims to be compensated.

The company will face a daily fine of about $13,000 if it fails to comply.

Most of the village of Bento Rodrigues in the state of Minas Gerais was flattened by the wall of mud.

Fears were mounting that the sludge, which flowed into local rivers, could be toxic and contaminate the water supplies of more than half a million people in Minas Gerais and the neighboring state of Espirito Santo.

Residents complained that the local water has a strong chemical smell, and posted photos on social media of ruined plantations and dead wildlife, including fish and turtles smothered in mud.

In Espirito Santo, a judge ordered state officials to test the Doce river water for contamination.

Corporations Under Scrutiny

BHP's Mackenzie arrived in Brazil earlier this week, his presence widely seen as contrasting with the low profile kept by Ferreira. Ferreira had made an initial visit on Saturday, according to the company, although the visit was not publicized at the time.

Samarco Mineracao is a joint venture between the two mining giants.

Shares in BHP Billiton and Vale, which is the world's biggest iron ore miner, have fallen sharply since the disaster, which Deutsche Bank estimates could cost more than $1 billion to clean up.

Minas Gerais officials ordered Samarco to halt operations. The company has put 85% of its employees in the two states on paid leave.

The two CEOs said in their statement that they were helping Samarco create an emergency fund for reconstruction and for victims. "It is our intention to work with the authorities in getting this fund working in as short a time as possible."

BHP and Vale have also provided experts in health, security and the environment, they said.

"The investigation is underway and Samarco will constantly update information on efforts to respond and on operations."

Carlos Eduardo Ferreira Pinto, a state prosecutor specializing in environmental cases, alleged there was "negligence" involved.

"A dam doesn't break by chance. The responsibility of the company is key," he told the Globo television network.

"Prosecutors are now trying to judge the scale of the damage so that the public can be compensated."

Ratings agencies warned that the cut in iron and mineral production after the accident, as well as possible fines it could face if sued, threatened Samarco's position.

Moody's stripped Samarco of its investment-grade credit score, while Fitch put the firm on negative watch for a possible downgrade.

Threatening legal action, Minas Gerais state prosecutors called for Samarco to compensate the displaced families, and set a schedule to move them from their temporary lodgings to homes and apartments, "so that the victims can get on with their lives."

President Dilma Rousseff, who has not visited the disaster zone, said Tuesday her government was "extremely worried" about the accident.

Copyright Agence France-Presse, 2015.

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