Two dead, dozens missing after dams burst at Brazil mine
By Stephen Eisenhammer MARIANA, Brazil (Reuters) - Casualties from two collapsed dams at a Brazilian iron ore mine owned by BHP Billiton and Vale mounted on Friday as rescue teams searched for dozens missing in the mud and debris left by the flood that devastated a village in the country's southeast. Firefighters confirmed 30 injuries and at least two deaths, but said the count was likely to rise as pouring rain slowed the search and mudslides knocked out roads and cell towers. "I heard screaming and saw the water coming fast, about 15 (49 feet) or 20 meters (66 feet) high," said survivor Antonio Santos, a construction worker who was at home in the village of Bento Rodrigues when the dams broke on Thursday afternoon. Bento Rodrigues is 150 km (93 miles) southeast of Belo Horizonte, Brazil's third largest city and the capital of the mining state of Minas Gerais. "Within 10 minutes the whole lower part of the village was destroyed, about 80 percent of it," he said in a gymnasium crowded with survivors in the nearby city of Mariana. Santos said he knew of four people who were swept away, including two children and two adults in their 50s. Firefighters said they did not if they would find all of those swept away by the wall of water released by the successive bursting of the two dams holding iron ore tailings and waste from the nearby mine. Television footage from the scene showed Bento Rodrigues, population 600, devastated by the fast-moving floods that tore off roofs, leveled trees and swept away cars. The floods extended as far as the town of Barra Longa, 80 kilometers (50 miles) away. The town was partially underwater. Hundreds of families were evacuated from the area after escaping to higher ground, Duarte Junior, the mayor of Mariana, 25 km (16 miles) from the mine, told television channel GloboNews after declaring a state of emergency on Friday morning. The head of emergency planning at Samarco, the joint venture company that runs the mine, told GloboNews of reports of seismic activity in the area in the hour leading up to the incident. The University of Sao Paulo's seismic center reported four weak tremors near Mariana and the town of Ouro Preto. The center said it recorded tremors magnitude 2 to 2.6 within an hour before the dams burst, but added it was impossible to say they caused the disaster without more extensive research. STOCKS, BONDS HIT The collapse paralyzed operations at the mine, a joint venture between Vale and BHP Billiton, the world's top iron ore miners, and raised fears of an expensive cleanup. Shares of Vale were off 5.5 percent in Sao Paulo trading and BHP Billiton dropped 5.7 percent in London. Samarco’s 4.125% 2022 dollar bonds dropped by more than 10 points on Friday before recovering slightly. By mid-morning, they were bid at a cash price of 75 cents to the dollar, down from an average of 82 cents to 83 cents earlier in the week, according to MarketAxess data. Analysts at Clarksons Platou Securities said on Friday that the likelihood of a lengthy stoppage at the Germano mine, which accounts for about one-fifth of seaborne pellet market, could lift iron ore prices. Samarco produces 30 million tonnes per year of pellet, used to make steel. While Samarco shut down production immediately, it was not clear how long the disaster would keep the mine from operating and what the impact would be on supplies. Iron ores prices were not affected and continued to fall on Friday. Pellet prices have plunged by one-third this year to their lowest in six years amid a global glut and waning Chinese demand. BHP Billiton Chief Executive Officer Andrew Mackenzie said at a news conference overnight that a full assessment of casualties and damage was hampered by nightfall, coming a few hours after the dam burst on Thursday. Samarco officials said on Friday the Santarém dam in the Germano complex had collapsed along with the rupturing of the Fundão dam on Thursday. The firm said it was too early to know the reasons for the disaster or the extent of carnage. The dams had valid licenses from environmental authorities, who last inspected them in July, according to Samarco, which said the dams are composed principally of sand and inert tailings, a mining waste product of metal filings. Tailings dams sometimes hold chemicals, adding to fears of potential contamination of the nearby Gualaxo do Norte river, but Samarco said there were no chemical elements presenting health risks. Samarco's iron ore is transported down a slurry pipe from Germano to Espirito Santo, where it is turned into pellets and shipped to customers including the Libyan Iron and Steel Co (Lisco), one of North Africa's biggest steelmakers. (Reporting by Stephen Eisenhammer; Additional reporting by Davide Scigliuzzo in New York; Writing and additional reporting by Brad Haynes and Anthony Boadle; Editing by Josephine Mason, John Stonestreet and Jeffrey Benkoe)
