MercoPress. South Atlantic News Agency

Mine disaster: Brazil fines BHP Billiton and Vale; expects companies to pay cleanup costs

Rousseff, who overflew the disaster area said the fines could be followed by penalties from other federal or state agencies.

Brazilian President Dilma Rousseff has slapped preliminary fines worth 250 million Reais ($94 million) against a BHP Billiton-Value owned mine in Minas Gerais state where two dams burst, killing at least seven people.

 The fines, announced after Rousseff flew over the affected area, come as federal prosecutors announced plans to work with state prosecutors to investigate possible crimes that could have contributed to the disaster at the mine, jointly owned by multinational mining companies BHP Billiton and Vale.

Rousseff said the fines, imposed by Brazil's environmental regulator for violations including river pollution and damages to urban areas where water service has been suspended, could be followed by penalties from other federal or state agencies.

The London traded shares in BHP slid 5% on Thursday extending their year-to-date loss to more than 32%. In Sydney, Australia, on Thursday, BHP shares ended down 1.6%, paring an initial sharper drop.

“We are determined to hold responsible those who are responsible for this,” Rousseff told reporters, citing the two multinationals by name, as well as their joint venture, Samarco Mineração.

The moves by federal officials toughen the response of a national government, now faced with a disaster affecting two states, that until recently had left much of the official reaction in the hands of the state government of Minas Gerais, a global mining hub and site of the dams.

Earlier on Thursday, the country's mining minister said the government would conduct an audit of other dams in the sector.

On Wednesday, Rousseff, a native of Minas Gerais, spoke with the chief executives of BHP and Vale, who held a press conference earlier that day to apologize for the disaster and promised to meet their obligations as the mine's owners.

During the conversation, Rousseff told them Brazil's government expected the companies to pay for rescue and cleanup efforts, as well compensation for more than 500 people who were displaced as their homes were destroyed.

Earlier Wednesday, a top federal prosecutor said the federal government would form a task force with Minas Gerais prosecutors to see if federal crimes may have been committed in addition to violations found by the state, responsible for the environmental licensing.

“Vale and BHP were completely careless in terms of prevention,” said Sandra Cureau, an assistant prosecutor general in Brasilia, Brazil's capital. “There has been a total lack of concern with the victims.”