Deadly Brazil leak will take years to clean
The tailings dam at a BHP joint venture iron ore mine in Brazil has burst, killing several people.
Two people have been reported dead and a further 28 are missing, including 13 workers from the mine.
Authorities say they fear the final death toll will climb, as emergency services enter the fifth day of their rescue and recovery.
The Fundao dam is operated by Samarco Mineração - a 50/50 joint venture between Vale and BHP. The breach flooded the local community of Bento Rodrigues with industrial waste across hundreds of kilometres.
A combination of the clean-up, community support, litigation, and possible rebuilding of the tailings dam are set to see it closed for several years.
Reports say prosecutors in Brazil could suspend licences at the venture, the mine's owners – Australia’s BHP and Brazilian firm Vale - face potential fines and compensation payouts, and is expected to have to continue paying the salaries of the Samarco workforce.
Deutsche Bank analyst Paul Young says the “catastrophic tailings dam failure” will mothball the operation shutter until financial year 2019.
He expects clean-up costs will exceed $US1 billion, with BHP's share to be about $US500 million.
“This accident will add further pressure to BHP's cash flow, growth and safeguarding of the progressive dividend,” he told Fairfax.
There could be an impact on the iron market too, with Samarco representing about 2 per cent of global supply.
Rebuilding a tailings dam should cost around $US400 million.
BHP Billiton chief Andrew Mackenzie has flown to Brazil to face the fallout.
“Based on public images of the failure we estimate that the dam contained over 300 million tonnes or 150Mm3 of tailings and Samarco could be down for years,” Mr Young said prior to his departure.