(Adds new death toll and comments from cemetery director;restores context)By Jake Spring and Gram SlatteryBRASILIA/BRUMADINHO, Brazil, Jan 29 (Reuters) - Vale SA , the world's largest iron ore miner, on Tuesday vowedto take as much as 10 percent of its ore output offline in orderto decommission 10 more dams like the one that burst last week,killing scores of workers and nearby residents.Chief Executive Fabio Schvartsman said it would temporarilyparalyze operations using those dams and spend 5 billion reais($1.3 billion) to decommission them over the next three years.
The move came as prosecutors began arresting Vale executivesover the Friday collapse of a tailings dam in the Brazilian townof Brumadinho, which was hit by a torrent of mining waste thatkilled at least 84 people and left hundreds more missing.
The disaster raised fresh questions about the company'scommitment to safety after a similar deadly dam burst just overthree years ago at a nearby mine it jointly owned.
"We decided the company should, once and for all, do what ittakes to remove any doubt about the safety of Vale's dams,"Schvartsman told journalists in Brasilia.The burst Brumadinho dam was one of 19 "upstream" tailingsdams owned by Vale, all in the state of Minas Gerais, built witha method banned in Peru and Chile for safety reasons.Vale had already begun the process of decommissioning nineof them. A corporate presentation seen by Reuters showed thatthe company had studied but did not implement several steps thatcould have prevented or lessened the damage from the Brumadinhodisaster. Schvartsman said Vale's board had approved the decision todecommission its 10 remaining upstream dams and suspend therelated mining operations as necessary, relocating 5,000 workersto other parts of the company.Those operations currently produce 40 million tonnes of ironore and 11 million tonnes of pellets per year, he said. Valeforecast total iron output of 390 million in 2018.
FIRST ARRESTSEarlier on Tuesday, police arrested three Vale employees,including two senior managers at the Corrego do Feijao mine inBrumadinho, as they began a criminal investigation into thedisaster with an expected death toll of more than 300 people.Vale said it was cooperating with investigators in the caseand the mining complex had been built to code, with equipmentshowing the dam stable two weeks before the disaster.Two other engineers, who worked for Germany's TUEV SUED on acontract where they attested to the safety of the Vale dam, werearrested in Sao Paulo, according to state prosecutors and aspokesman for the German firm. Minas Gerais state investigators issued a total of fivearrest warrants and seven search warrants on suspicion ofmurder, falsification of documents and environmental crimes, ajudge's decision showed.The collapse of the dam in the hilly, pastoral region haskilled at least 84 people, according to firefighters' count onTuesday evening, with another 276 missing and likely dead.The search and recovery efforts have taken their toll onweary firefighters, helicopter pilots and volunteers.Jos?(C) Eust??quio da Silva, 63, the head of cemeteries inBrumadinho, has also been working long days with the teamdigging the town's new graves with picks and shovels."All I see is sadness and hopelessness," he said,overlooking a hillside pocked with 98 fresh graves - only fiveof which had been filled.'PREMEDITATED'
Chief Financial Officer Luciano Siani said Vale was doingall it could, offering money to mourners, extra tax payments tolocal government, a special membrane to remove mud from theriver and major investments to make its dams safer.Yet residents in the devastated town of Brumadinho have beenunmoved, watching in shock and anger as one dead body afteranother has been pulled from the mud.Following a deadly 2015 tailings dam collapse just a fewtowns over at a mine half-owned by Vale, the disaster remainedunforgivable in the eyes of many Brazilians.At the headquarters for the local mining union, which lostmore than one in 10 members by organizers' count, treasurer Jos?(C)Francisco Mateiro blamed the company and authorities for puttinghim and his comrades at risk."They call it an accident but the design of those dams waspremeditated," he said. "There have been warnings about allmining dams for a long time now."Still, prosecutors and politicians have not held their fire.Government ministers have said Brazil's mining regulationsare broken. The country's top prosecutor said the company shouldbe criminally prosecuted and executives held personallyresponsible. On Monday, a presidential task force contemplated forcingout Vale's management, but by Tuesday senior officials pushedback on the idea."There aren't conditions for any degree of interference. Itwould not be a good signal to the market," presidential chief ofstaff Onyx Lorenzoni said in a news briefing.
($1 = 3.7201 reais)<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^FACTBOX-Vale tailings dam collapse adds to long list of miningdisasters BREAKINGVIEWS-Vale's Brazil dam damage will hurt its peers too EXCLUSIVE-Vale eyed dam design changes in 2009 that may haveprevented disaster GRAPHIC-Sudden disaster Indigenous village faces existential threat from Brazil damburst ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Jake Spring in Brasilia and Gram Slattery inBrumadinho;
Additional reporting by Marta Nogueira, Pedro Fonseca, GabrielStargardter in Rio de Janeiro; Lisandra Paraguassu and RicardoBrito in Brasilia; Marcelo Teixeira in Sao PauloEditing by Brad Haynes and Matthew Lewis)