BHP, Vale set up emergency fund

BHP Billiton and Vale have set up an emergency fund to help those affected by the Brazil dam burst. (AAP) Source: AAP

BHP Billiton and Vale have set up an emergency fund to help affected families and for rebuilding works at the Samarco mine in Brazil.

BHP Billiton boss Andrew Mackenzie has described as "heartbreaking" the devastation wreaked by a deadly dam burst at a mine in Brazil and pledged to set up an emergency relief fund.

BHP and the mining giant's joint venture partner at the Samarco iron ore mine, Vale, are setting up the fund to assist affected families and pay for rebuilding works at the mine.

The companies are expected to put in more than $US100 million ($A141.70 million) initially, and have promised more assistance as required.

"We are so sorry to everyone who has suffered or will suffer from this terrible tragedy. The devastation that we have witnessed is heartbreaking," Mr Mackenzie said on Thursday, after surveying the scene of the November 5 disaster with Vale chief Murilo Ferreira.

Mr Mackenzie flew to Brazil earlier this week to inspect the damage at the mine following last Friday's tragic dam burst that left six people dead and 21 missing.

He says BHP and Vale are committed to recovery and rebuilding efforts at the site, where mud mixed with mining waste poured from two broken tailings pond dams at the Samarco iron ore facility near Mariana in southeastern Brazil.

Around 630 people have been forced from their homes in the accident and fears for the safety of a third dam prompted new evacuations while emergency services made repairs on Wednesday.

Fears have also grown that the sludge could contaminate the water supplies of more than half a million people in Minas Gerais and the neighbouring state of Espirito Santo.

Brazil's government has said it may fine the mining giants for the environmental catastrophe.

"Right now, our focus is on safety, rescue and immediate humanitarian support. We are working to identify further resources Samarco will need in the response effort," Mr Mackenzie told reporters.

Samarco generates about three per cent of BHP's underlying earnings before interest and tax, and the company has said it is reviewing its iron ore production guidance for fiscal 2016, following the incident.

The company says it is too early to speculate on the cost of the disaster, but analysts estimate it could be upwards of $US1 billion.

BHP shares have tumbled more than 10 per cent since news of the incident, and hit a seven-year low on Wednesday, to close at $20.95.

The stock fell sharply again on Thursday, closing 34 cents, or 1.6 per cent, lower at $20.61.

Source AAP

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