Mariana (Brazil) (AFP) - Firefighters rescued 500 survivors Friday from a torrent of mining waste that killed at least 17 people and destroyed a village after two dams burst in southeastern Brazil.

They searched frantically for survivors after the mudslide erupted Thursday from waste reservoirs at the partly Australian-owned iron ore mine in southeastern Brazil.

The torrent ripped the roofs off houses and left villagers clinging to their roofs.

"There was a horrible noise and we saw the mud approaching. We ran for it. It is a miracle that we are still alive," said Valeria de Souza, 20, with a baby in her arms and tears in her eyes.

The mudslide flattened Bento Rodrigues, a village of some 600 people near the southeastern city of Mariana in the historic mining region of Minas Gerais.

De Souza spoke to AFP after arriving at a gymnasium in Mariana, where some 150 survivors from the destroyed village were being housed.

There were 17 people officially confirmed killed and 50 injured, "but more bodies have been found," said Adao Severino Junior, the fire chief in Mariana.

He warned that more than 40 people could be missing.

"There is no way to survive under that material," he said of the mudslide.

- 'Enormous' environmental damage -

Firefighters said they had rescued 500 people who were covered in iron and mineral deposits that were then washed off.

The local Mariana miners' union said the sludge was toxic, but the company operating the mine, Samarco, said it was "inert" and contained no harmful chemicals.

Officials and experts said the mud threatened nearby wildlife.

"The environmental damage is enormous," said one of the state prosecutors investigating the disaster, Carlos Ferreira Pinto.

Most of the village's inhabitants work for Samarco, jointly owned by BHP Billiton of Australia and Vale of Brazil.

Samarco said the causes of the rupture were not known.

Experts at Sao Paulo University's Seismology Center said four small earthquakes were recorded in the region on Thursday, though it was unlikely such small tremors would break a dam.

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- Fleeing over rooftops -

Shares in Vale and BHP Billiton plunged Friday on the Sao Paulo and London stock exchanges.

The president of Samarco, Ricardo Vescovi, said the company was "mobilizing absolutely all necessary efforts" to help people struck by the disaster.

"We are also not sparing efforts to contain the environmental damage," he said in a video message.

Minas Gerais has been Brazil's main mining hub since the 16th century. First came gold, then mining of iron ore, other minerals and semi-precious stones.

Mariana and the nearby village of Ouro Preto sent firefighters and ambulances. Mariana residents donated mattresses, clothes, food and water for the stricken villagers.

The head of Samarco's emergency planning operations, Germano Silva Lopes, told a news conference the company had detected a tremor but no anomalies in the dams before they burst.

He said the first ruptured reservoir contained 55 million cubic meters of iron mineral deposits -- less than its full capacity. All of it flooded out into the adjoining valley on Thursday afternoon.

A second dam holding back seven million cubic meters of waste broke shortly afterwards.

Vescovi said the company's emergency procedures were correctly carried out but "we could improve them."

Fifteen-year-old Marcos Junior de Souza told the Folha de Sao Paulo newspaper that he fled across the rooftops to escape the torrent.

"All my life I had heard people saying the dam was going to break," he was quoted as saying. "I never thought much of it until the water flooded my house."