Two dead, dozens missing after two dams burst

Casualties from two collapsed dams at a Brazilian iron ore mine mounted on Friday as rescue teams worked through the night to find dozens missing in mudslides that devastated a village in the country's southeast.

A spokesman for firefighters leading the rescue confirmed 30 injuries and at least two deaths, but said the count was likely to rise as the search advanced slowly after mudslides knocked out roads and cell towers.

"In reality there are a lot more, but we can't confirm any more than that. We don't even know that we'll find everybody," said firefighter Adão Severino Junior in the nearby city of Mariana.

He said the local hospital was "saturated" and victims arriving by helicopter were being sent to nearby Ouro Preto.

The head of emergency planning at Samarco, the joint venture company that runs the mine, told GloboNews of reports of seismic activity in the area in the hour leading up to the incident. The company's press representatives could not confirm the reports.

The collapse paralyzed operations at the mine, a joint venture between Vale and BHP Billiton, the world's top iron ore miners, and raised fears of an expensive cleanup.

Shares of Vale were off 4.3 percent in Sao Paulo trading and BHP Billiton dropped 7.6 percent in London.

Analysts at Clarksons Platou Securities said on Friday that the likelihood of a lengthy stoppage at the Germano mine, which accounts for about one-fifth of seaborne pellet market, could lift iron ore prices. Samarco produces 30 million tonnes per year of pellet, used to make steel.

Pellet prices <.IO62-CNI=SI> have plunged by one-third this year to their lowest in six years amid a global glut and waning Chinese demand.

HUNDREDS OF FAMILIES EVACUATED

Television footage from the scene showed the village of Bento Rodrigues devastated after mudslides unleashed waste water when the dams collapsed, leveling trees, tearing roofs off homes and leaving a car precariously perched on top of a wall.

Hundreds of families were evacuated from the area after escaping to higher ground, Duarte Junior, the mayor of Mariana told TV channel GloboNews after declaring a state of emergency on Friday morning.

BHP Billiton Chief Executive Officer Andrew Mackenzie said at a news conference overnight that a full assessment of casualties and damage was hampered by nightfall, coming a few hours after the dam burst on Thursday.

Samarco officials said on Friday the Santarém dam in the Germano complex had collapsed along with the rupturing of the Fundão dam on Thursday. The firm said it was too early to know the reasons for the disaster or the extent of carnage.

The dams had valid licenses from environmental authorities, who last inspected them in July, according to Samarco.

The dams are composed principally of sand and inert tailings, a mining waste product of metal filings.

Tailings dams sometimes hold chemicals, adding to fears of potential contamination of the nearby Gualaxo do Norte river, but Samarco said there were no chemical elements presenting health risks.

Samarco's iron ore is transported down a slurry pipe from Germano to Espirito Santo, where it is turned into pellets and shipped to customers including the Libyan Iron and Steel Co (Lisco), one of North Africa's biggest steelmakers.