An estimated 300 people are missing after the collapse of a dam which was holding back mining waste in south-eastern Brazil.

The death toll has risen to at least 40 after the disaster inundated a mining complex in the state of Minas Gerais.

State governor Romeu Zema warned that anyone found to be responsible for the disaster “would be punished”.

According to reports, the complex, owned and operated by Brazilian company Vale, was issued an expedited licence to expand in December due to “decreased risk”.

Environmental groups in the area say this approval was unlawful.

A total of 23 people were taken to hospital after the collapse, according to the Minas Gerais fire department.

There had been some signs of hope earlier on Saturday when authorities found 43 people alive. Company officials also had said that 100 workers were accounted for.

Brazil Dam CollapseThe mud covers the backyard of a house (AP)

Vale workers were eating lunch on Friday afternoon when the dam collapsed, unleashing a sea of reddish-brown mud that knocked over and buried several of the company’s buildings as well as the surrounding areas.

The level of devastation quickly led President Jair Bolsonaro and other officials to describe it as a “tragedy”.

The rivers of mining waste have also raised fears of widespread contamination.

According to Vale’s website, the waste, often called tailings, is composed mostly of sand and is non-toxic. However, a UN report found that the waste from a similar disaster in 2015 “contained high levels of toxic heavy metals”.

Brazil Dam CollapseThis house was completely destroyed by the flow of mining waste (AP)

Vale CEO Fabio Schvartsman said he did not know what had caused the collapse. He confirmed about 300 employees were working on the site when it happened.

After the dam collapsed, parts of the town of Brumadinho were evacuated, and firefighters rescued people by helicopter and ground vehicles. Several helicopters flew over the area on Saturday while firefighters carefully traversed heavily inundated areas looking for survivors.

The flow of waste reached the nearby community of Vila Ferteco and a Vale administrative office, where employees were present.

On Friday, Minas Gerais state court blocked 260 million dollars (£197 million) from Vale for state emergency services and is requiring the company to present a report about how they will help victims. On Saturday, the state’s justice ministry ordered an additional 1.3 billion dollars (£989 million) blocked.

Brazil Dam CollapseA van is seen in half buried in the mud (AP)

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

Considered the worst environmental disaster in Brazilian history, it left 250,000 people without drinking water and killed thousands of fish. An estimated 60 million cubic metres of waste flooded rivers and eventually flowed into the Atlantic Ocean.

Mr Schvartsman said what happened on Friday was “a human tragedy much larger than the tragedy of Mariana, but probably the environmental damage will be less”.

Brazil Dam CollapseRescue efforts are continuing at the scene with dozens of people still missing (AP)

Mr Bolsonaro, who assumed office on January 1, took part in a flyover of the area on Saturday.

On Twitter, he said his government would do everything it could to “prevent more tragedies” like Mariana and now Brumadinho.

The far-right leader campaigned on promises to jump-start Brazil’s economy, in part by deregulating mining and other industries.

Environmental groups and activists said the latest spill underlined a lack of regulation, and many promised to fight any further deregulation by Mr Bolsonaro in Latin America’s largest nation.