Seven bodies have been found and more than 400 people are unaccounted for after a dam operated by the mining firm Vale collapsed in the Brazilian state of Minas Gerais, releasing a wave of red iron ore waste and raising fears of widespread contamination.

The fire chief Col Edgar Estevão said nine people were wounded and 100 people had been rescued from the sea of mud released by the dam, according to the G1 news site.

 Rescue workers search for victims after the collapse of the Brumadinho dam Photograph: Douglas Magno/AFP/Getty Images

Vale released a list of 412 employees and contractors who were missing. The document lists 412 names of people whom it had been unable to contact and who may be victims of the mudslide. The fire brigade estimated that 300-350 people were missing.

Brazil’s president, Jair Bolsonaro, visited Minas Gerais and flew over the disaster area on Saturday, after dispatching three ministers there on Friday.

The state governor, Romeu Zema, said on Friday he did not expect many survivors. “We know now that the chances of having survivors are minimal and that we will probably rescue bodies,” he said.

Brazilian television showed images of survivors being winched to safety by a helicopter after the disaster at the Feijão mine near Brumadinho, less than two hours from the state capital, Belo Horizonte.

As videos and photos of the destruction wrought by the torrent of mud appeared on social media, enraged Brazilians demanded punishment for anyone responsible.

The incident comes less than four years after another tailings dam collapsed in Minas Gerais, killing 19 people in what was Brazil’s worst environmental disaster. That dam was operated by Samarco, which at the time of the disaster was jointly owned by Vale and the Anglo-Australian mining firm BHP Billiton.

Vale’s chief executive, Fabio Schvartsman, said on Friday that one dam containing iron ore waste – known as tailings – had failed and another overflowed. Brazil’s environment ministry had earlier said three dams were involved in the disaster.

“Most of those affected were Vale employees,” he said. “I’m completely torn apart by what happened.”

The wreckage of a car and a house are seen a day after the collapse of a dam at a mine belonging to Brazil’s giant mining company Vale. Photograph: Douglas Magno/AFP/Getty Images

Among those missing were 100 mine workers who were having lunch in an administrative area when it was hit by a torrent of sludge and water, said a fire brigade spokesman, Lt Pedro Aihara.

Brazil dam disaster: firm knew of potential impact months in advance

Our main worry now is to quickly find out where the missing people are,” Aihara said on the GloboNews cable television channel. He later told TV Record that the Pousada Nova Estância hotel had been swept away along with 38 staff and guests.

Set in rolling countryside, the town of Brumadinho has dozens of guesthouses for tourists visiting the nearby Inhotim outdoor art complex but is also a home for mine workers. Local media said Inhotim, which attracts visitors from all over the world, had been evacuated but was not affected.

“The mud still has not reached the town. The mud formed a barrier stopping the river and the town is on alert about what could happen,” said Bernadete Parreiras, owner of the Pousada Lafevi guesthouse near Brumadinho’s centre. “Everyone is in panic, people disappeared, many friends, many family, many people from the town have disappeared … I don’t have words to express the feeling in the town and what people are suffering.”

 A collapsed bridge caused by flooding triggered by the dam collapse. Photograph: Bruno Correia/AP

The company said in a statement it had made 40 ambulances and a helicopter available for rescue work. It said the 86-metre (280ft) dam, built in 1976, held 11.7m litres of mining waste and had condition-of-stability declarations from an international company called TÜV SÜD. It was no longer in operation, was regularly inspected and was being decommissioned, the company said.

But Vale was trying to increase capacity in the mine complex where the dam was located and at another nearby mine, according tothe Intercept Brasil, which highlighted a report by the National Civil Society Forum for Hydrographic Basins, a network of civil society groups, that had urged the authorities not to grant the licence.

Brazil’s ministry of the environment said it had set up a crisis cabinet and that the environment minister, Ricardo Salles, and Eduardo Bim, head of the ministry’s environment agency Ibama, were heading to the scene.

 A torrent of orange sludge released by the dam’s collapse. Photograph: Xinhua/Barcroft Images

“Our major concern at this moment is to attend any victims of this serious tragedy,” Bolsonaro tweeted. “All reasonable measures are being taken.”

Bolsonaro has attacked environment agencies including Ibama for holding up development with what he describes as excessive licensing requirementsand has advocated freeing up mining in protected indigenous reserves.

Environmentalists said Brazil had failed to learn from the Mariana disaster, in which 375 families lost their homes. They are yet to be rehoused. The three companies that operated the Mariana dam – Samarco, Vale and BHP Billiton – spent more than $1bn (£760m) on a cleanup and relief operation and paid millions of dollars in fines over the disaster, but no individual has been convicted.

Greenpeace Brazil’s campaigns director, Nilo D’Avila, said: “This new disaster with a mining waste tailings dam – this time in Brumadinho – is the sad consequence of a lesson not learnt by the Brazilian state and mining companies. Cases like these are not accidents but environmental crimes that should be investigated, punished and repaired.”