The search for potential survivors of a dam collapse in Brazil has been suspended amid fears that another nearby dam owned by the same company was also at risk of breaching.

Authorities are evacuating several neighbourhoods in the southeastern city of Brumadinho that are within range of the B6 dam, owned by the Brazilian mining company Vale.

There was no immediate word on how many people were evacuated.

A spokesman for firefighters in Minas Gerais state Pedro Ahiara said the risk of the other dam breaking continues.

Even before the latest news, hope that loved ones had survived a tsunami of iron ore mine waste from Friday’s dam collapse in the area was turning to anguish and anger over the increasing likelihood that many of the hundreds of people missing had died.

Company employees at the mining complex were eating lunch on Friday afternoon when the first dam gave way.

By Saturday night, when authorities called off rescue efforts until daybreak, the toll stood at 40 dead with up to 300 people estimated to be missing. All day Saturday, helicopters flew low over areas encased by a river of mud and mining waste as firefighters dug frantically to get into buried structures. Sonia Fatima da Silva, whose son had worked at Vale for 20 years, was trying to get information about him.

“I’m angry. There is no way I can stay calm,” she said.

“My hope is that they be honest. I want news, even if it’s bad.”

The flow of waste reached the nearby community of Vila Ferteco and an occupied Vale administrative office.

On Saturday, rooftops poked above an extensive field of the mud, which also cut off roads.

Some residents barely escaped with their lives.

In addition to the 40 bodies recovered by Saturday night, 23 people were admitted to hospital, according to the Minas Gerais fire department. There had been some signs of hope earlier on Saturday when authorities found 43 more people alive.

The company said that while 100 workers were accounted for, more than 200 were still missing.

Vale chief executive Fabio Schvartsman said he did not know what caused the collapse.

The rivers of mining waste raised fears of widespread environmental contamination and degradation.

Over the weekend, state courts and the justice ministry in Minas Gerais froze about $US1.5 billion ($A2.1b) from Vale assets for state emergency services and told the company to report on how it would help the victims. Brazil’s Attorney-General Raquel Dodge promised to investigate the mining dam collapse.

“Someone is definitely at fault,” she said.

Another dam administered by Vale and Australian mining company BHP Billiton collapsed in 2015 in the city of Mariana, Minas Gerais, resulting in 19 deaths and forcing hundreds from their homes.

Considered the worst environmental disaster in Brazilian history, it left 250,000 people without drinking water and killed thousands of fish.

HOW THE DISASTER UNFOLDED
Vale has been shaken by the disaster, the second in three years it has suffered in the same state.

Workers at its mine had been lunching in an administrative area Friday when they were suddenly engulfed by millions of tons of muddy trailings — a waste by-product of the iron-ore mining operations.

The ruptured dam, 42 years old and 86 metres high, had been in the process of being decommissioned, and Vale said it had recently passed structural safety tests.

After overflowing a second dam, the vast muddy mass barrelled down toward Brumadinho, population 39,000, but only glanced along it before spearing its way through vegetation and farmland, smashing houses and swallowing tractors and roads in its way.

Vale’s CEO Fabio Schvartsman and Minas Gerais Governor Romeu Zema both expressed pessimism, warning the toll could rise.

“From now, the odds are minimal (to find more people alive) and it is most likely we will recover only bodies,” Governor Zema told reporters.

In Rio, Schvartsman spoke of a “human tragedy.” “We’re talking about probably a large number of victims — we don’t know how many but we know it will be a high number,” he said.

Vale shares plummeted on the New York Stock Exchange Friday, closing eight per cent lower.

Brazil’s environmental protection agency hit Vale with an initial $US66.5 million ($A90 million) fine over the disaster.

Minas Gerais state authorities said they were about to levy another penalty. They have already obtained a court order blocking $2US70 million ($A376 million) of Vale funds in bank accounts with a view to using it for victim relief.

The mining company, one of the world’s biggest, was involved in a 2015 mine collapse elsewhere in Minas Gerais that claimed 19 lives and is regarded as the country’s worst-ever environmental disaster.

‘LESSONS NOT LEARNED’
Would-be rescue volunteers were urged to stay away because of the slippery, perilous mud. Media were pressed not to use drones to avoid collisions with search and rescue helicopters.

“There used to be people here, houses. I’m just floored by this tragedy,” Rosilene Aganetti, a 57-year-old resident in one of the affected villages said, pointing to an expanse of mud.

“Several of my friends who were in the Vale cafeteria are missing,” she said, holding back sobs.

Another woman, Suely de Olivera Costa, desperately trying to find her husband who worked at the mine, accused Vale of “destroying Brumadinho and nobody is doing anything — what will be the next town?”.

The Brazil office of environmentalist group Greenpeace said the dam break was “a sad consequence of the lessons not learned by the Brazilian government and the mining companies.”

Such incidents “are not accidents but environmental crimes that must be investigated, punished and repaired,” it added.

While the death toll has yet to be fully established, the disaster at the mine could well rank among the worst recorded in Brazil.

In 2008, a moving mass of mud and rocks from an illegal iron ore mine slammed into the Chinese town of Taoshi, in northern Shanxi province, killing 262 people.

A mine collapse at a gold mine in Merriespruit, South Africa caused 17 deaths in 1994.