The Big Australian sinks to fresh lows By Vesna Poljak Malcolm Maiden - Forum, Page 7 Australian mining giant BHP Billiton is in turmoil, with a rout in commodities prices and a deadly dam burst in Brazil sparking a fall in the share price below $20 to its lowest level in nearly a decade. 
The blue chip miner, whose share price traded just shy of $50 in 2008 at the peak of the mining boom, slumped 1.8per cent on Friday, closing at $20.23 and dipping below $20 during the session.
Fund managers fear worse to come, including possible cuts to its generous dividend policy.
Fallout from the disaster at its Samarco iron ore joint venture in Brazil is growing, where nine fatalities have been confirmed and 19 people are still missing after a dam failure last week.
Brazilian officials have blamed the owners of the mine, accusing them of being careless, and prosecutors signalled they will explore the case for a criminal investigation.Fund managers believe that markets have not yet seen the bottom for commodity prices.
The BHP slump led the broader market lower yesterday, with the ASX 200 falling 3.1per cent for the week after sliding 1.4per cent on Friday.
Julian Babarczy, a portfolio manager at Regal Funds Management, said this was not the equivalent of a financial crisis for commodities, but a classic cyclical downturn, putting pressure on BHP's share price.
"We're in a bear market for commodities and we think that continues," he said.
"We've had a once in a generation boom in commodity prices which was underpinned by urbanisation and fixed asset investment in China, which drove commodity prices higher and incentivised huge investments in supply, and we're only now seeing much of that supply materialise at a time when commodities prices and demand levels are heading lower."
BHP and its Brazilian partner Vale revealed the accident has spread toxic tailings for 440 kilometres downstream, affecting 11 communities in Minas Gerais.
The water supply is tainted.
Brazilian President Dilma Rousseff said BHP and Vale face fines and further penalties. Preliminary fines total 250million reais ($93.2million).
"We are determined to hold responsible those who are responsible for this," Ms Rousseff said.
Ultra-low interest rates and plunging foreign exchange rates in commodity-producing countries are keeping troubled producers in business, which drives down prices because production is not responding to lower levels of demand. Exacerbating the problem is that as the US dollar rallies anticipating a rise in US interest rates, financial conditions tighten for buyers of commodities in emerging markets.