VALE Vale SA

By John Lyons 

SÃO PAULO--President Dilma Rousseff flew on Thursday over towns devastated by the failure of two mining dams last week, as anger mounted over what critics say has been a weak and slow government response to an accident that left a trail of damage hundreds of miles long.

The collapse of two dams at an iron-ore mine operated by a joint venture between Brazil's Vale SA and Australia's BHP Billiton sent 62 million cubic meters of mining mud flooding through remote mountain valleys on Nov. 5, ripping apart small colonial towns and leaving at least eight people dead. Searchers are using poles to prod lakes of mud for the at least 19 people still missing, including children.

On Thursday, Ms. Rousseff said the mine's operator, Samarco Mineração SA, and its owners Vale and BHP Billiton, broke federal environmental and other laws.

She announced an initial $66 million fine against Samarco and vowed to hold the three companies responsible for what she called Brazil's "biggest environmental disaster to affect large regions of the country."

The president spoke in Governador Valadares, a riverside city some 200 miles from the mining accident that has been without drinking water for days. The river there is bright orange with mining waste.

Ms. Rousseff's visit to the region--her first since the disaster seven days earlier--came amid growing criticism of her administration's slow response and of its regulation of the mining companies.

"There seems to have been a total indifference among all parties about the plight of the victims in this disaster, the people who didn't receive aid, the children who died, the rivers that have been destroyed, " said Sandra Cureau, a federal prosecutor in Brazil's attorney general's office who is responsible for environmental issues.

Ms. Cureau said the dams, which hold back permanent lakes of mine waste, shouldn't have been approved without an alarm system to signal their failure to towns below. Safety plans at the mine site are likely to come under scrutiny, she said.

Ms. Cureau said she was seeking to form a task force to pursue civil and criminal penalties related to the accident.

The federal task force would come in addition to any future lawsuits at the state level.

A state prosecutor has said there is evidence Vale was depositing extra waste from an unrelated mine behind the dams, adding to the possibility that the containment dams were at or beyond capacity.

The breach unleashed a flood of sludge so vast it could fill the Dallas Cowboys' football stadium more than 20 times, swamping towns and villages 45 miles from the accident. The mining mud eventually reached the Doce River, killing fish and wildlife and forcing cities to suspend water treatment as the orange water flows to the sea.

Much of the rescue work in the first 48 hours was carried out by volunteers, such as local off-road-vehicle clubs. Brazilian federal emergency teams that responded to big floods in recent years weren't deployed in this case.

"The situation is too grave for all of the responsible to just sit and watch the rescue workers get stuck in the mud caused by their neglect and incompetence," wrote Miriam Leitao, one of Brazil's most widely read columnists, in the O Globo newspaper.

Government and company officials haven't explained why the dams broke. BHP Chief Executive Andrew Mackenzie and Vale Chief Executive Murilo Ferreira have said their firms hold no responsibility since the dams are run by the limited-liability company Samarco. Vale and BHP have owned Samarco on a 50-50 basis since 2000.

Some people don't want the mine operators punished. The mayor of Mariana, the municipality where the mines collapsed, has already called on state and federal regulators not to shut down mining operations as a result of the accident. Mining revenue accounts for around 80% of the city's annual budget.

State and municipal officials coordinating the rescue efforts are working out of the mining company's corporate headquarters on the outskirts of Mariana.

The Brazilian joint owner of the failed dam, Vale, is the world's biggest iron ore producer, and plays a critical role in Brazil's economy as a whole. Brazil's government is a shareholder in Vale and wields influence in its boardrooms. Brazil's Minister of Mines and Energy has called for caution in the investigation of the mining accident to avoid rushing to judgment.

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November 12, 2015 21:01 ET (02:01 GMT)

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