A 2013 report by the Minas Gerais University-linked Instituto Pristino, commissioned by the state environment ministry, warned about the risk of dams bursting and recommended putting in place a plan to monitor the structural integrity more closely and frequently.

“As you will appreciate, an issue like this will be relevant to any investigations that follow this tragic incident,” BHP said in an e-mailed response to questions. “In those circumstances we need to let those investigations take their course. So it’s just not appropriate to comment any further.”

Samarco said it’s too early to say what caused the accident and that the dams were deemed to be in compliance with safety standards in a July inspection.

Samarco’s insurance coverage totaled more than $1 billion as of mid-2014. A large-scale disaster such as the one it experienced last week is likely to lead to lawsuits and other actions that may take years to resolve, according to Bloomberg Intelligence analyst Kenneth Hoffman. Its structure as a stand- alone company may shield joint owners BHP and Vale from deep losses related to the dam collapse, Hoffman said.

Eoin Treacy's view

The BRL250 million ($66million) initial fine announced by Dilma Rousseff today is quite a bit larger than what was expected but for companies like BHP Billiton and Vale this is not the same kind of fine that has rocked Volkswagen. The weak oil price and moribund market for iron-ore are more important influences. 

BHP Billiton has been steadily raising its dividend for more than a decade and is the only miner in the S&P Europe 350 Dividend Aristocrats Index. The current yield of over 10% suggests investors are betting the dividend coverage of 50% will not be supported by additional disposals or rights issues. The price broke downwards this week and a clear upward dynamic will be required to check momentum.