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Brazil’s Vale says Samarco disaster to cut output at nearby mines

Two people died and another 25 are missing presumed dead.

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Amaral said the disaster would shape the debate over Brazil’s mining code, drawing attention to the need for new safety and environmental regulations that have been tied up in Congress for years.

The Minas Gerais Environment Secretariat said on Monday that Samargo had been under embargo in the region since Friday.

Shares in BHP Billiton (ASX:BHP) fell sharply on Sydney Monday, touching a seven-year low, as the mining giant took an additional hit from the tailings dam disaster at the Samarco iron ore mine in Brazil, which co-owns with Vale (NYSE:VALE). Clean-up and repairs along miles of flooded river could cost the companies a fortune.

More than 600 people were left homeless by the mudslide, said a spokesman for the state government.

BHP chief executive Andrew Mackenzie is visiting the site this week and the company has offered its full support to help with immediate rescue efforts and an investigation.

Mr Wilkins said the incident will probably lead to BHP trying to increase the management oversight and due diligence of its South American joint ventures, but it was unlikely to take the “knee-jerk” reaction of divesting Cerrejon and Antamina because of the Samarco disaster.

“The third dam in the complex, the Germano dam, is being monitored by Samarco”, BHP said on Monday.

The first that Eliene Almeida, head teacher at the municipal school in Bento Rodrigues, knew of the deadly mud flow that destroyed her village was a cry from her husband.

‘Anyone would have done the same, ‘ she told Reuters.

“We’ve tried everything, there’s nothing more we can do”, said Maximiliano Inacio, a local firefighter. “It moved so fast”.

Many have injuries to their feet after fleeing their homes barefoot.

“We saw him coming with the two children, but he wasn’t able to hold on to them”, Marlon Celio, 19, a neighbor, told the newspaper.

As rescue teams labored to reach isolated communities, state officials were taking precautions to contain the environmental fallout from the burst dams.

The local Mariana miners’ union said the sludge was toxic, but Samarco said it was “inert” and contained no harmful chemicals. Instead, it said it called the civil defense authorities, a few families and community leaders to warn them. Meanwhile, residents who came in contact with the thick mud were advised to shower and dispose of their clothing.

The cause of the dams’ rupture remains unknown.

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The operation, which was producing at an annual rate of about 30 million metric tons in September, uses water-filled pipelines to transport ore from its mines to processing plants near its port. It provides pellets, used in steel output, to about 20 countries, with dominant markets in the USA and Europe, according to researcher AME Group.

Crews continue search for people lost in mudslide