VALE Vale SA

By Reed Johnson And Luciana Magalhaes 

SÃO PAULO--As a massive stream of sludge unleashed by the mining industry's worst-ever dam break flowed through southeastern Brazil to the Atlantic Ocean this week, the mine's operator said two more of its dams could be at risk of collapsing.

Samarco Mineração SA, a joint mining venture owned by Anglo-Australian BHP Billiton Ltd. and Vale SA of Brazil, said Wednesday that it is taking emergency measures to stabilize pressure levels at the two at-risk dams, named Germano and Santarém, in the mountains of Minas Gerais state.

The structures, known as tailings dams, are earthen embankments built to contain water and mineral waste from the mines. Company officials said that both dams are operating with "safety factors" lower than those recommended for maintaining equilibrium between the dam's structure and pressure from the wastes that could cause it to rupture.

"We reiterate once again that Samarco has been engaging all its efforts to minimize the effects of the accident and take preventive measures in order to increase the safety factors of the two structures," the company wrote in an email.

The acknowledgment of the new measures to secure those dams comes almost two weeks after another Samarco tailings dam, the Fundão, used to store iron-ore waste, burst open, unleashing billions of gallons of mud. The company previously had said two dams broke on Nov. 5, but it has in recent days clarified that it was only one.

Officials still are trying to add up the economic and environmental costs of the deluge that sent an immense wave of water and mining waste crashing into villages and farms many miles downstream in the southeast states of Minas Gerais and Espirito Santo.

At least 11 people were killed in the disaster and 12 more are unaccounted for. Authorities have said that hundreds of thousands of people were left without drinking water.

Earlier this week, public prosecutors said Samarco has agreed to set aside about $260 million to fund initial cleanup efforts following the catastrophe. The gesture hasn't quelled criticism of the mining companies or predictions by some environmentalists, academics and financial analysts that the total bill could climb into the billions of dollars.

A Samarco spokeswoman declined to comment.

Officials of the country's chief federal environmental agency, Ibama, said the contaminated water is expected to reach the Atlantic Ocean as early as Friday, after coursing through the Doce River, one of Brazil's longest.

Long stretches of the Doce turned a murky orange several days ago, and fishermen and local government officials have reported dire impacts on the fish population as well as a potential threat to turtles spawning downstream. Scientists rescued some fish and placed them in tanks in hopes of someday restocking the river.

Many environmentalists believe it will take years, if not decades, before the disaster's full impact can be measured.

Fernanda Pirillo, an Ibama environmental emergencies coordinator, said Samarco is taking preventive measures to minimize the impact, such as placing containment barriers between the river and the sea. But these steps can't completely contain the damage, which extends along 300 miles of river, she said.

Samarco has dispatched tanker trucks to distribute water to communities in the Doce basin that are facing shortages and rationing.

Mining company officials have yet to provide any explanation of how the dam break occurred. Vale and Billiton officials repeatedly have said the disaster is Samarco's responsibility, but some Brazilian authorities and lawyers say that claim won't be enough to shield the parent companies from legal action.

Ms. Pirillo said that, under federal environmental law, the fine levied for any single environmental infraction must be limited to 50 million reais, or about $13 million. She said this maximum limit hasn't been updated for the last 17 years.

"The view of Ibama is that there should be no limit," she said.

Write to Reed Johnson at Reed.Johnson@wsj.com and Luciana Magalhaes at Luciana.Magalhaes@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 18, 2015 17:31 ET (22:31 GMT)

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