Brazilian authorities have halted operations at an iron ore mine following a deadly mudslide, the latest blow to co-owners BHP Billiton and Vale.

At least four people are dead and about 20 are missing after a deluge of mud and mining sludge burst through retaining walls at the Samarco mine on Thursday and buried most of the nearby village of Bento Rodrigues.

The mine, a joint venture between Australia’s BHP Billiton and Brazil’s Vale, can only resume operations once the investigation is finished and the damage repaired, an environment office spokeswoman said.

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State officials gave the order to close the mine on Friday.

“Samarco is only authorised to carry out emergency actions aimed at minimising the impact of the collapse and preventing new damages,” the environment office said.

Shares in BHP Billiton, the world’s largest mining firm, fell five per cent Monday in London to a new seven-year low.

Shares in Vale racked up heavy losses on Friday and were down one per cent Monday in Sao Paulo.

Despite its focus on safety, BHP recorded five work-related deaths in the year to June 30, which chief executive Andrew Mackenzie has described as “disappointing”.

BHP said it recorded no fatalities in financial year 2014, and had an injury frequency performance of 4.2 injuries per million hours worked.

Deustche Bank analysts warned the disaster could shut down Samarco for a decade, with clean-up costs of more than $US1 billion ($A1.42 billion).

“Words cannot describe the impact of this tragedy on the employees and contractors of Samarco, their families and the community,” said BHP chairman Jac Nasser.

Mackenzie announced he would fly to Brazil this week “to understand first-hand the human, environmental and operational impacts”.

It plans to hire external investigators.

The mine did not have sirens to warn residents.

Authorities say they have identified two bodies pulled from the sludge and are still working to identify two others. Rescue workers warn the death toll is likely to rise.

More than 600 people have been left homeless.

A small group of survivors protested on Monday against Samarco in Mariana, the nearby town where the evacuees from Bento Rodrigues have been taken.

Brazilian media reports said the nearly 60 million cubic metres of ochre sludge could contaminate the water supplies of more than half a million people.