VALE3 Vale SA

By Jeffrey T. Lewis and Paulo Trevisani 

SÃO PAULO -- Brazilian police arrested five people Tuesday in connection with the deadly collapse of a dam owned by iron-ore producer Vale SA, including employees of the mining company, as investigators moved quickly to uncover the cause of the disaster.

The number of people killed by the tide of mud and mining debris that spilled from the burst dam had risen to 65 by Monday evening. A spokesman for rescue workers said officials expected the death toll to rise significantly Tuesday as searchers and trained dogs locate some of the nearly 300 people who are still missing and feared dead.

The dam's collapse on Friday swept away nearby offices and a lunchroom belonging to Vale and sent a river of mud smashing into parts of the small town of Brumadinho, in Minas Gerais state.

Police said two engineers working for a company hired by Vale to inspect the dam before it had collapsed were arrested in São Paulo. A spokesman for TÜV SÜD, a German auditor and certification organization, said two of its workers who had assessed the dam in June and September 2018 were arrested. Vale said TUV had said the dam passed regulations.

TÜV's spokesman said the company regrets the collapse of the dam and said it is collaborating with authorities. He declined to comment further.

Three of Vale's employees were detained in or near the city of Belo Horizonte, the capital of Minas Gerais. Police also seized documents and other items belonging to the five detainees.

Vale said in a statement that it is cooperating fully with investigators.

The catastrophe came less than four years after a similar accident at a nearby dam half-owned by Vale, in a town called Mariana also in Minas Gerais state, which killed 19 people and contaminated hundreds of miles of river valley with mining waste. The government at the time, headed by then-President Dilma Rousseff, was sharply criticized for its slowness in responding to the accident.

No arrests were made during the probe of the Mariana accident, and investigators initially were hampered by their lack of knowledge and experience regarding Vale's internal processes, according to José Adércio Leite Sampaio, a federal prosecutor who worked on the earlier case.

Before Mariana, "we had never had to investigate such a big environmental crime, we had no manual to use," Mr. Sampaio said. "Now we have a road map to follow for investigations of this size."

The police also seized documents and other materials Tuesday, which could offer evidence if any crimes were committed, Mr. Sampaio said.

The detainees will be questioned by prosecutors in Belo Horizonte and can be held for as many as 30 days, according to police. One reason the workers might have been arrested could be to prevent them from destroying or removing evidence, or to shield the detainees from possible pressure to modify their testimony, according to one legal expert.

Brazil's federal government is also acting quickly to help survivors and punish any wrongdoing. Brazil's top prosecutor said Monday evening that she would pursue criminal charges against Vale executives.

President Jair Bolsonaro, who was sworn in Jan. 1, formed a crisis cabinet within hours of the accident in Brumadinho, and ordered troops and rescue personnel to the site the same day. On Tuesday his cabinet met to discuss measures to ensure the safety of other tailings dams in Brazil.

Television news reports showed images of helicopters carrying bodies pulled from the mud to areas where they can be placed in refrigerated trucks and taken to morgues. Military firefighters were shown wading through or clambering over a river of sludge, often using long poles to both probe the muck and keep themselves afloat

Three hundred more police arrived in the Brumadinho area Tuesday, and another 400 will arrive Wednesday, to help prevent possible looting of evacuated areas and to stop unauthorized people from entering the so-called hot zone, among other tasks, according to a police spokesman.

The accident hurt Vale's shares on Monday, losing about one quarter of their value. The shares recovered ground Tuesday, and were up about 3% at midday.

--Alistair MacDonald contributed to this article.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com and Paulo Trevisani at paulo.trevisani@wsj.com

(END) Dow Jones Newswires

January 29, 2019 12:00 ET (17:00 GMT)

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