River & Ocean Flow Red With Death, Courtesy Of Iron Mining Conglomerate


As if it was a scene taken from the blockbuster disaster movie, 2012, rivers of death and destruction flowed red for over 400 miles before emptying into the Atlantic ocean as Brazil suffered its worst ecological catastrophe in history.  The failure of a massive 300+ foot iron tailings dam at BHP Billiton and Brazil’s Vale Samarco Iron Mine, caused 50 million cubic feet of toxic iron sludge to pour into the countryside killing 19 people.


(Bento Rodrigues: photo courtesy of Felipe Dana/AP)

Even though this 30 story-tall iron mining tailings dam collapsed nearly a year ago, the broad ecological and legal issues are just now coming to the forefront.  For example, an article just released yesterday titled, Brazil Charges 21 With Homicide For Failing To Avert Samarco Mine Disaster stated the following:

Brazilian prosecutors charged 21 people with qualified homicide on Thursday for their roles in the collapse of a tailings dam at the Samarco Mineração SA iron ore mine last November that killed 19 people.

The charges follow what is now considered to be the largest environmental disaster in Brazil’s history. The dam collapse released millions of tonnes of muddy mine waste, wiping out several small communities.

Prosecutor Jose Leite Sampaio told reporters at a briefing in Belo Horizonte, broadcast live by GloboNews, that executives at Samarco had clear awareness the dam could fail but ignored the risks and prioritized profit.

There were signs that the dam was unsafe for several years before its collapse, but Samarco officials, executives, employees and board members appointed by Vale and BHP failed to take proper action, Sampaio said.

This is the first time to my knowledge that a country has charged mining executives with “qualified” homicide.  If convicted, those accused could face sentences up to 54 years in jail.  No doubt, the penalties should be stiff if guilt or severe negligence is proven.

And that just might be the case.  According to a recent article by the BBC, Samarco Dam Failure In Brazil ‘Caused By Design Flaws:

The report said that a change in the Fundao dam’s design between 2011 and 2012 led to less efficient water drainage, and ultimately to the dam’s collapse in November 2015.

There was increased weight on the tailings as the height of the dam was raised to more than 100m.

This weight pushed clay-like silt in one part of the dam outwards “like toothpaste from a tube,” ultimately causing the dam to collapse.

A small earthquake on the day of the dam burst may also have “accelerated” the failure, the report added.

While a small earthquake was an additional factor in the Samarco Tailing Dam collapse, it was likely the straw that finally broke the camel’s back.  The size of the Samarco Tailings Dam can be seen in these stunning before and after pictures:


(Bento Rodrigues Before: July 2015, courtesy of ABC.net.)


(Bento Rodrigues Before: November 2015, courtesy of ABC.net.)

Furthermore, another article titled, BHP’s Deadly Dam Collapse Linked To Ramping Up Production, stated:

But Four Corners has seen evidence of a long history of problems at the BHP-owned dam dating back to the beginnings of its construction in 2007, and learned that independent testing of water samples from the river system has found levels of arsenic and lead 10 to 20 times higher than Brazilian regulations allow.

Brazilian state police now allege the disaster was partially caused by the mine ramping up production to offset the falling iron ore price. Brazilian authorities say the dam collapse has produced the biggest environmental disaster in the country’s mining history.

There seems to be a mining industry trend for increased tailings dam spills when the price of the metal falls.  This is likely due to the corporate mentality of “Cost Cutting” when times are lean and mean…. LEAN if you are the corporate lackey, and MEAN if you live downhill of the dam.

I found actual evidence of this in another interesting article, Mining Dams Grow To Collasal Heights, And So Do The Risks:

A 2009 study by longtime industry engineers that examined 42 years of accident data found the frequency of tailings spills increases when commodity prices fall, “in the manner of a hangover after a good party.” This could reflect pressures to cut costs “once mines constructed on the basis of rising commodity prices are forced to operate with the reality of lower commodity prices,” said the study by engineers Todd Martin and Michael Davies.

With the price of iron ore falling 64% in three years, who could blame these fine upstanding BHP & Vale mining executives for cutting a few corners to keep bonuses forth coming and shareholders happy (sarcasm intended).  While this massive tailings dam collapse has been financially challenging for these companies, at least they don’t live in the towns impacted by the 50 million tons of heavy metal toxic sludge which has now polluted over 400 miles of Brazilian rivers and streams.

This is the huge problem most in the U.S. or other western countries don’t have to experience as we drive to Starbucks to get our double-decaf latte.   As the saying goes, THEY WORK….. WE EAT.

However, it would be prudent to update it to, THEY WORK, DIE & GET POLLUTED, WHILE WE EAT.

I have to say, I had no idea of this Samarco Tailings Dam disaster until I stumbled upon this weekend doing some research on my favorite Mega-Mining Company, BHP Billiton.  BHP has been a favorite research project of mine because they are by far the one of the most reckless company I have seen in regards to safety and financial stupidity.

As I mentioned in a prior article, BHP has suffered $12 billion of impairment write-offs for its glorified U.S. shale oil and gas assets.  Now, with Brazilian $44 billion lawsuit issued this May staring at BHP Billiton and Vale in the face, times are becoming a bit rough to make the big profits the mega-mining companies enjoyed five years ago.

If base metal prices continue to fall, watch as continued cost cutting results in an ever-increasing number of large tailings dam spills.  The situation for the Brazilian people living around the now contaminated Doce River with toxic laden heavy metal mud is quite dire.  The ramifications of the spill will last for decades.

The mining industry’s trend to go from big to gargantuan sized mines and tailings dams, is just a response to the Falling EROI (Energy Returned On Investment) of oil.  By increasing to bigger and bigger mining projects, these companies are trying to offset overall rising costs by implementing “Economies of scale.”

Economies of scale is the ability to lower unit costs by increasing the size or volume of production.  While this may work in the short-term, what happens when the highly leveraged financial system finally cracks and disintegrates?  It will cause a great deal of mining company bankruptcies.  As more and more mining companies going bankrupt, who will continue to monitor and take care of the hundreds or thousands of large tailings dams across the world?

Unfortunately, will be the ultimate cost of the falling EROI.  By cheating the falling EROI, the benefits were brought forward, but the costs will be left behind.

Here are some more images of the aftermath of the Samarco Tailings Dam collapse, courtesy of TelesurTV: Biggest Ecolgocial Disater In Brazil’s History:





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18 Comments on "River & Ocean Flow Red With Death, Courtesy Of Iron Mining Conglomerate"


    I see how little readership and comment activity on this post. What’s the matter? Cat got your tongue? Too tough of a subject matter to read or discuss? Or maybe, it’s more fun to focus on the PARTY and not the CLEAN UP afterwards.

    This is typical of most people I find.

    Anyhow… I thought this was a very important issue, but I gather most people too concerned about counting their future gold and silver profits.


    • You are correct Steve. What happened here is happening on a global scale. In politics, economics and in finance. We all think it doesn’t concern us. Due to our collective greed we inherited from the monkeys and our shortsighted abuse of natural recources we will all soon have to sit down at a table of consequences.

      Its nothing but disgusting what happened here, but hey, what would you expect from a species that starts wars to prop up gdp?

      We all know, in our hearts, we’re messing up the planet in a big way.

    • Steve I follow Guy McPherson’s work. Nothing can shock me any more. The world as we know it is coming to an end. Sorry Folk’s that’s it. This planet is dying soon.

      • Juergen,

        LOL… you follow Guy’s work too? Gosh, once you get your mind around the stuff he puts out, you go down the RABBIT HOLE of rabbit holes.


        • Love your work on metals Steve, as well as your recent interviews.
          But, to rubbish Guy’s work doesn’t do your image any good.

          Look at the maps of Arctic temps and ice extent charts here.
          Tell me how the methane clathrates aren’t going to be released.


          The climate story going forward will be all about methane and not CO2.

          • Jeremy,

            Where did I say that Guy’s work is “rubbish?” All I said to Jurgen, “You follow him too.” Which means… I FOLLOW GUYS WORK AS WELL.

            I came across Guy about two years ago. After about 2 months of in depth research of his work, I WAS TOTALLY DEPRESSED to say the least. I actually considered just shutting down the site.

            However, Guy said… DO WHAT YOU LOVE, and I love the research I am doing. So, I will continue as long it keeps my interested.


          • Cheers Steve.
            Apologies for the misunderstanding.

          • Juergen Heil | October 26, 2016 at 8:33 pm |

            Steve, I had my wakeup call in April 2014,I saw him talking on YouTube. I was shocked and I thought about my son immediately. He is 7 years old now. This is just so infinite sad story.

    • “I see how little readership and comment activity on this post. What’s the matter? Cat got your tongue? Too tough of a subject matter to read or discuss? Or maybe, it’s more fun to focus on the PARTY and not the CLEAN UP afterwards.”

      well this IS an investment blog, not a “save the world” blog. you know, the “get yours and get out” approach to society. clean up is no fun, it’s not libertarian, and above all it’s just not profitable.

  2. Steve,

    It is hard to find words as this is such a sad and disgusting situation. Sad because of the horrific effect on the environment and the people that live there. More importantly it is disgusting because it is a reflection of the worlds current culture. Take what you can because the world owes it to you, only sorry if you get caught and Gosh, I didn’t know.

    The absolutely worst part is that it is a harbinger of many terrible things to come as the world descends in to deflation. Miners, builders and regulators everywhere will be cutting costs as the global economy deteriorates. So expect more of the same or worse. This is far from the first mine leakage affecting rivers and streams. It is only the latest and worst to date.

    It is a mere peek in to the hell that this world is headed.


    • heh. just wait until all those expended rod pond facilities can no longer pay their bills. the ponds are abandoned and evaporate, the rods melt and vaporize ….

      not to mention all these gmo crops that 1) can’t grow without special chemicals and 2) exhibit aggressive contamination behaviors with other species.

  3. What happens to the world’s nuclear power plants in the future steve? I think tailing dams will be the least of our worries.

    • Pez,

      Agreed, the Nuclear power plants will be an even worse problem. However, everything adding to the huge problem that we will have to deal with in the future.


  4. Bhavesh Modi | October 25, 2016 at 8:22 pm |

    Thanks Steve, regards.

  5. Juergen Heil | October 26, 2016 at 7:38 am |

    Steve, I am very upset with the folks from peakoilbarrel.com. I had something to add to your conversation between You and Rune Likvern about the thermodynamic Oil collapse.
    But the Folks over there censored my comment. I believe they not interested in free speech at all. They behave like all the other MSM. So please forgive me when i misuse Your site for posting my comment to this conversation: (feel free to delete this post when you don’t like it to be linked here)


    here is my comment I wanted to add:

    SRSrocco and Rune Likvern both of you are right with the EROI. But you Talking about different things. Rune you don’t include the privately used energy (or in our case only Oil) while SRSrocco talks about the hole energy used by the producer and its employees. Why is this important? Let’s imagine an oil company produced 1 Barrel of oil to so they consumed 0.5 barrels for processing into a finished product. This translate into an EROI of 2:1. So a half barrel could be sold to the market. But what happens when the employees of the company use a 0.25 barrel for their own private consumption. Only 0.25 barrel cold be sold to the outside customers this translates to an EROI of 1.3333:1.
    If you include the employee’s direct energy consumption than EROI is falling dramatically but if you include all the energy the employee’s equipment (cars and all other stuff )used at production EROI is falling even more.
    If for all the stuff produced the needed 0.125 barrel than the amount of oil sold to outsiders falls also to 0.125 barrel this translates into overall EROI of 1.1429:1.
    With this kind of calculating the EROI would reach the 1 to 1 limit much faster. If you think long enough about it, you come to the conclusion all energy even the employee’s private used energy must be taken into account.

  6. Well, to be quite honest with you, 95% of the population or more, could give a rats ass about Brazil, BHP or Vale. Most don’t have the time to look up from their tablets and cell phones to even notice if there are still stars in the sky at night.

    These ‘Big Boy’ outfits BHP, etc., are all the same. When push comes to shove, like everything, it’s all about the money, whatever it takes.

    I’ve been in the mining exploration business all my life and trust me, I have walked across many, many wastelands, moon surfaces being a better descriptive. From the Yukon to Australia and most countries in between. So many places hidden away in the middle of nowhere that are uninhabitable and will be for a long, long time.

    Over the last ten years, but more pronounced, the last five, there have been major efforts by mining companies as a whole to achieve better environmental standards. Prior to that, the concentration was on safety standards, probably because it was a little more expensive to overhead if you lost a man or ten. A shutdown and investigation would take place.

    That trend has reversed somewhat, in the sense that, for example, I was in South America in 2013 and a van load of workers went off a cliff on their way to work. Seventeen men and women died on impact at the bottom and it was news for a day, no impact follow-up, etc., etc.

    Meanwhile, a couple miles away at the mine site, everyone was being versed in the cause and effect of a droplet of fuel landing on the ground from a filling hose.

    Nonetheless, there have been many improvements in zero return methods to keep tainted water out of the environment at every step of the way until you come to the tailings pond and dam. First and foremost, all of these mines use vast amounts of chemicals to separate the ore from general material. Probably 90% of those chemicals come from one company so there is probably not a 100% effort put into alternative methods of extraction. So unless, I have missed something recently, all mines have poison in their veins at the outset.

    The dams have in their planning worst case scenerio’s and it’s not really about loss of life or pollution, it’s more about which route will be cheapest if the dam goes south on them. A town and 19 deaths, farmer deaths that’s nothing in the bigger picture of the cash cow at hand.

    Probably what has happened this time around, due to the price depression you mention, they simply did not have enough cash to throw at it before shit really hit the fan. It’s a nice touch with all the charges that are coming forward and it will be interesting to see who the final fall guy or guys will be. Take one for the team and all that.

    So, back to the beginning, lack of comments.

    The world is awash in whitewash. The general public can only see what is right in front of them and only for all long as it takes for the next thing to be in front of them.

    I had a picture a couple of days ago from my wife, kids and some relatives (I’m away). Of the eight people in the photo all had some form of electronic device in their hand or on their lap and of course, the wife is doing the selfie with her cell phone. I don’t think any of them give two farts about Brazil, Japan or any other disaster.

    Carrying that further, I am living in a Latin country which is like everywhere, cell phones and tablets in every hand I walk or drive by all day and all night until people drop. Do they care about the dam bust, maybe to see if they can get something trending, but only until the moment something else comes up in a few seconds. Dirt and water has not got much sidewalk appeal.

    It’s like climate change and an interesting article I read last week. Nobody, is paying much attention and it is sad. Most won’t pay attention until the water is lapping at the door and of course it will be to late by then.

    Are there solutions to these nightmares, of course, it has to be in everyone’s face everyday. Facebook and all these other social things should be putting little reminders up after every ten ads as an example and every time your page opens.

    In regard to mining or mining responsibly, more and more efforts are being made, but until there is an alternative to steel cars, tin roofs, metal pens and all the rest of it, then expect more. Take for example, the Lithium space, everyone is wrapped up on the clean air side of the equation, not the earth scars that are unfolding as we speak with the mining side. Most people are only interested in the product not the process.

    I am just completing a personal experiment, hence being away as I noted earlier and I think it can be an eye opener. I decided to take three months out of my life and put myself into a situation where I had no access to money, in an area where everyone is hurting, except of course the wealthy. Sort of a ‘Black like Me’ scenario if anyone has read the book. The point of the experiment of course, was whether I could survive and how was I going to do it. Why, because when the inevitable collapse comes, I want to be somewhat pre-loaded. Anyway, that story is for another time.

    Hope your still awake.

    • “Are there solutions to these nightmares, of course, it has to be in everyone’s face everyday. Facebook and all these other social things should be putting little reminders up after every ten ads as an example and every time your page opens.”

      won’t work. people are getting better and better at filtering out anything clamoring for their attention. of course the attention-getters are getting better too – if you look at the recent techniques you can see the science and psychology behind getting someone to drop everything they’re doing (including traffic safety) and jerk their eyes and ears to you – but it doesn’t matter because people are learning how to dismiss anything and everything.

      “I decided to take three months out of my life and put myself into a situation where I had no access to money, in an area where everyone is hurting, except of course the wealthy. Sort of a ‘Black like Me’ scenario if anyone has read the book. The point of the experiment of course, was whether I could survive and how was I going to do it. Why, because when the inevitable collapse comes, I want to be somewhat pre-loaded.”

      heh. dude, you’re mis-training, and there’s nothing more deadly than mis-training. your situation is missing the element of everyone looking at you as if you’re food ….

  7. Hmmm, I’ll have to stew on that one.

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