Mining giants' CEOs visit site of Brazil disaster

The CEOs of the world's largest mining company, Australia-based BHP, and Brazilian iron ore giant Vale visited Wednesday the scene of last week's deadly dam burst at a mine reservoir in southeastern Brazil.

The executives' visit came as pressure mounted on the corporations to answer for the November 5 disaster, which left at least six dead and 21 missing after mud mixed with mining waste poured from two broken tailings pond dams at the Samarco iron ore facility near Mariana.

BHP Billiton CEO Andrew Mackenzie arrived in Brazil earlier this week, his presence widely seen as contrasting with the low profile kept by Murilo Ferreira, CEO of Vale, the world's biggest iron ore miner.

Samarco Mineracao is a joint venture between the two giants.
Local officials say the latest death toll stands at six, with 21 still missing and 631 people forced from their homes.

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.

Samarco must also provide a helicopter for an indefinite period of time to inspect areas affected by the nearly 60 million cubic meters (two billion cubic feet) of ochre sludge.

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

Most of the nearby 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.

- Mine shut down -

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

Shares in BHP Billiton and Vale have fallen sharply since the disaster, which Deutsche Bank estimates could cost more than
Mackenzie was visiting "to understand first-hand the human, environmental and operational impacts of the incident," the company said.

Vale's Ferreira made an initial visit on Saturday, according to the company. However, the visit was not publicized at the time.

Vale also said it had ordered safety inspections of its 115 other tailings pond dams.

"Evidently we cannot return to the past to recover the lives lost in this sad episode, but we are not going to limit our efforts to help rebuild the lives of each affected person, as well as recover the environment," Ferreira said in a statement.

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.