(Recasts with comments from acting president, senator, lawyerand environment minister, updated share reaction and fines)By Gram SlatteryBRUMADINHO, Brazil, Jan 28 (Reuters) - Brazil's governmentweighed pushing for a management overhaul at miner Vale SA on Monday as grief over hundreds feared killed by adam burst turned into anger, with prosecutors, politicians andvictims' families calling for punishment.By Monday, firefighters in the state of Minas Gerais hadconfirmed 60 people killed by Friday's disaster, in which aburst tailings dam sent a torrent of sludge into the miner'soffices and the town of Brumadinho.Nearly 300 more people are unaccounted for, and officialssaid it was unlikely that any would be found alive. Brazil's acting president Hamilton Mourao told reporters agovernment task force on the disaster response is looking atwhether it could or should change Vale's top management.Public-sector pension funds hold several seats on the miner'sboard."The question of Vale's management is being studied by thecrisis group," said Mourao, who is serving as acting presidentfor some 48 hours while President Jair Bolsonaro recovers fromsurgery. "I'm not sure if the group could make thatrecommendation."Shares of Vale, the world's largest iron ore and nickelproducer, plummeted as much as 25 percent in Monday trading onthe Sao Paulo stock exchange, erasing more than $16 billion inmarket capitalization. Senator Renan Calheiros, who is in the thick of a Senateleadership race, called on Twitter for Vale's top management tobe removed urgently "out of respect for the victims ... and toavoid any destruction of evidence."
One of Vale's lawyers, Sergio Bermudes, told newspaper Folhade S. Paulo that management should not leave the company andCalheiros was trying to profit politically from the tragedy.
Brazil's top prosecutor, Raquel Dodge, said the companyshould be held strongly responsible and criminally prosecuted.Executives could also be personally held responsible, she said.The disaster at the Corrego do Feijao mine occurred lessthan four years after a dam collapsed at a nearby mine run bySamarco Mineracao SA, a joint venture by Vale and BHP Billiton , killing 19 and dumping toxic sludge in a major river.
While the 2015 Samarco disaster unleashed about five timesmore mining waste, Friday's dam break was far deadlier as thewall of mud hit Vale's local offices, including a crowdedcafeteria, and tore through a populated area downhill."The cafeteria was in a risky area," Renato Simao deOliveiras, 32, said while searching for his twin brother, a Valeemployee, at an emergency response station."Just to save money, even if it meant losing the littleguy... These businessmen, they only think about themselves."As search efforts continued on Monday, firefighters laiddown wood planks to cross a sea of sludge that is hundreds ofmeters wide in places, to reach a bus in search of bodiesinside. Villagers discovered the bus as they tried to rescue anearby cow stuck in the mud.Longtime resident Ademir Rogerio cried as he surveyed themud where Vale's facilities once stood on the edge of town."The world is over for us," he said. "Vale is the top miningcompany in the world. If this could happen here, imagine whatwould happen if it were a smaller miner."
Nestor Jos?(C) de Mury said he lost his nephew and coworkers inthe mud."I've never seen anything like it, it killed everyone," hesaid.
SAFETY DEBATEThe board of Vale, which has raised its dividends over thelast year, suspended all shareholder payouts and executivebonuses late on Sunday, as the disaster put its corporatestrategy under scrutiny.Since the disaster, courts have order a freeze on 11.8billion reais of Vale's assets to cover damages. State andfederal authorities have slapped it with 349 million reais ofadministrative fines.German insurer Allianz SE may have to cover someof the costs of the dam collapse, two people familiar with thematter told Reuters. "I'm not a mining technician. I followed the technicians'advice and you see what happened. It didn't work," Vale CEOFabio Schvartsman said in a TV interview. "We are 100 percentwithin all the standards, and that didn't do it."Many wondered if the state of Minas Gerais, named for themining industry that has shaped its landscape for centuries,should have higher standards."There are safe ways of mining," said Joao Vitor Xavier,head of the mining and energy commission in the state assembly."It's just that it diminishes profit margins, so they prefer todo things the cheaper way - and put lives at risk."Reaction to the disaster could threaten the plans ofBrazil's newly inaugurated president to relax restrictions onthe mining industry, including proposals to open up indigenousreservations and large swaths of the Amazon jungle for mining.Environment Minister Ricardo Salles said in a TV interviewon Monday that Brazil should create new regulation for miningdams, replacing wet tailings dams with dry mining methods.
Mines and Energy Minister Bento Albuquerque proposed inSunday newspaper interview that the law should be changed toassign responsibility in cases such as Brumadinho to the peopleresponsible for certifying the safety of mining dams.
"Current law does not prevent disasters like the one we sawon Brumadinho", he said. "The model for verifying the state ofmining dams will have to be reconsidered. The model isn't good."The ministry did not immediately respond to questions aboutthe interview.($1 = 3.7559 reais)<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^New dam disaster puts Vale CEO, deals and dividends underscrutiny Brazil prosecutor says Vale dam burst may scramble Samarco talks BREAKINGVIEWS-Vale disaster threatens Brazil's deregulation push ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Gram SlatteryAdditional reporting by Tatiana Bautzer, Maria Carolina Marcelloand Ricardo BritoEditing by Frances Kerry and Marguerita Choy)
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