Deutsche Bank analyst Paul Young has estimated the eventual cost of the clean-up could exceed $US1 billion ($1.4 billion). If federal fines are applicable, we will apply them.
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“Evidently we can not 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.
Fears were mounting that the sludge, which then flowed into 400 kilometres of local riverways, could be toxic and contaminate the water supplies of more than half a million people in Minas Gerais and the neighbouring state of Espirito Santo.
“Families are being relocated so that they are in greater security”, a spokesman for the Minas Gerais state government told AFP.
BHP shares have tumbled 10.7 per cent in the five days to Wednesday evening’s market close, slumping to $20.95, the lowest since value November 2008.
The reason for the dam’s failure is still unclear – there is speculation of poor design or a seismic event. A second downstream dam, Santarem, was badly damaged and the third dam, Germano, is being closely monitored.
The warning also came as the chief executives of Australia-based BHP, the world’s largest mining company, and Brazil’s Vale, the world’s biggest iron ore miner, scrambled to publicly take responsibility for the disaster.
We also met with the Samarco incident response teams and civil authorities who have worked tirelessly to evacuate the local community and search for missing people. They said that investigations are ongoing and Samarco will provide further updates relating to the response and operations.
Vale CEO Murilo Ferreira will travel to Mariana early Saturday, the company said, adding that it was supporting Samarco and that it had ordered safety inspections of its 115 other tailings pond dams.
Iron-ore output from Vale’s Fábrica Nova and Timbopeba mines will be cut by three-million tonnes in 2015 and by nine-million tonnes in 2016, the company said in a statement.
Prosecutors in Brazil are reportedly considering suspending licences at the venture and the mine’s owners face potential fines and compensation payouts.
As investigators probe the cause of the disaster, investors are concerned a temporary suspension of the joint-venture’s license to operate in the area may become permanent.
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Samarco’s bond rating was cut to junk on Tuesday by Moody’s Investors Service.
