Roundup: Heavy fine for companies involved in Brazil's tailings dam collapse

Brazilian President Dilma Rousseff on Thursday announced an initial federal fine of 250 million reais (66.3 million U.S. dollars) for the companies involved in the collapse of two tailings dams.

Rousseff traveled to the site of the two tailings dams in Minas Gerais state on Thursday, which was the largest environmental disaster in the country in a decade.

"The preliminary fine is of 250 million reais for environmental damage, for compromising the water basin, damage to public property and for the interruption of electricity distribution services," the president told a press conference.

In addition to the federal fine, state and municipal administration and environmental agencies from the affected regions can establish their own fines as well.

The dams are run by mining company Samarco, which is owned by two giants in the sector: Vale and BHP Billinton. Rousseff said that the companies will not only pay the fines, but will have to compensate the victims and will be held responsible for the environmental restoration of the affected areas.

Earlier on Thursday, Rousseff flew to Mariana in Minas Gerais state, the first town hit by a tsunami of mud and iron ore mining residues.

In Mariana, the neighborhood of Bento Rodrigues was completely destroyed. Nine deaths were already confirmed, while 19 others remained unaccounted for. Over 600 people were left homeless.

A torrent of mud then continued to advance over the region until it reached the Doce River, which flows to the neighboring state of Espirito Santo and then to the Atlantic Ocean.

Doce is Espirito Santo state's most important river. Since Nov. 5, when the dams collapsed, the mud wave has already affected a number of towns in both states.

Several towns had to suspend water distribution, and others are expected to do so in the next few days.

Severe ecological disasters are expected in the entire course of the Doce River as fish is expected to die and the mud is expected to affect the livelihood of fishermen.

Environment Minister Izabella Teixeira said Wednesday that the government will carry out a thorough investigation of the incident.

Local authorities have already ruled that Samarco must provide housing for the affected people and give them allowances for an indefinite period of time.

Rousseff announced that the government will build new water pipe networks to get water from local lagoons in order to re-establish water distribution in some of the affected areas. Endi