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Vale and BHP to pay $260m more for Brazilian dam burst

damage from mudslide Image copyright Getty Images
Image caption The cause of the dam breach has not yet been determined

BHP Billiton and Vale are to pay a further 1bn reais (£171m; $260m) for the mining disaster that killed 11 people in Brazil earlier this month.

The mining giants had already been ordered to pay 250m reais after a dam burst at a mine run by Samarco, a firm they jointly own.

Twelve people remain missing following the incident in southern Brazil that set off a deadly mudslide.

The fine will provide aid to the victims and fund environmental repairs.

The head of Brazil's environmental agency, Ibama, has described it as the worst mining accident in the country's history.

Prosecutors in the Brazilian state of Minas Gerais said the preliminary payment would cover the clean-up costs and compensation.

"We know that the amount of damages could be much greater, but the agreement establishes a firm legal guarantee," prosecutor Carlos Eduardo Ferreira Pinto said in the statement.

Brazilian miner Vale's chief financial officer Luciano Siani earlier refused to speculate on the level the clean-up costs and penalties could ultimately reach.

State prosecutors are also considering whether to pursue criminal charges.

Image copyright Getty Images

On Tuesday, BHP Billiton chief executive Andrew Mackenzie expressed his "sadness and concern" for the community affected by the dam burst.

He added: "Our priority remains the welfare of the workforce and the local community and I am encouraged by the support I saw Samarco providing.

"Samarco continues to provide food, water and emergency supplies to local communities.

"They also continue to work with the authorities' efforts to supply clean water to the communities further downstream along the Doce River."

More than 600 people who lost their homes in the accident have been placed in hotel or B&B accommodation, he added.

Meanwhile, Brazilian President Dilma Rousseff said the country was "committed to blame those who are responsible".

The cause of the dam breach has not yet been determined, but one of the structures was being extended as part of an expansion project at the time.

Mr Siani said he did not yet know when the mine would reopen.

The incident is expected to affect Vale's production next year, and the firm has said it will give a new forecast for 2016 production in December.

Mining is Brazil's third-largest industry.

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