A fatal dam breach at a mine operated by two of the world’s biggest mining companies has flooded large areas of Brazil with toxic waste, according to two United Nations experts.
The claims, made by special rapporteurs John Knox and Baskut Tuncak, heaps further pressure on Brazilian mining giant Vale SA and Australia’s BHP Billiton Plc (BHP) and may drastically increase their financial liabilities in the wake of the disaster.
Three weeks ago, the Samarco Fundão dam holding back tailings from a giant iron ore mine operated by the two companies burst. The ensuing flood killed 12 people and another 11 are still missing, presumed dead. But the scale of the ensuing environmental disaster is only just becoming clear. The UN report claimed the waste released by the breach contained high levels of toxic heavy metals and other harmful chemicals.
Knox said the damage “is the equivalent of 20,000 Olympic swimming pools of toxic mud waste contaminating the soil, rivers and water system of an area covering over 850 kilometers.” Toxic sludge now working its way down one of Brazil’s biggest rivers, the Doce, and towards the Abrolhos National Marine Park, threatening protected forest land and habitat, Knox said, adding that preventive measures taken by the companies were “clearly insufficient.”
However, BHP Billiton rejected the claims in a statement Thursday, saying that the tailings that had entered the Doce are “chemically stable” and “will behave in the environment like normal soils in the catchment.”
BHP said that the findings of two Brazilian environmental bodies, the National Water Agency and the Brazilian Geological Service, backed up its position. Samples collected on Nov. 14 indicated that “concentrations of metals obtained at these sites do not significantly differ” from the results of 2010 tests.
BHP’s response wasn’t enough to stop its share price from sliding to its lowest in nearly a decade. The company’s shares have fallen by nearly two-thirds from their 2010 peak and have fallen 38% this year alone as the price of iron ore, its most important commodity, has collapsed due to a slowdown in the Chinese economy. The Samarco joint venture between BHP and Vale has so far set aside $260 million to fund emergency remedial measures and compensate the victims.