More than 50 more were injured in the disaster in southeastern Minas Gerais state yesterday, said Adao Severino Junior, fire chief in the city of Mariana.
The number of missing looks set to surpass 40 but this is not official yet, he added.
Television footage showed a torrent of muck several hundred metres long that had swamped houses and ripped off their roofs.
The mud reached the intact roofs of some houses, atop of which stranded people waited to be rescued. Some homes seemed to have been swept hundreds of meters by the rushing wall of mud.
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"The situation is grim. It is dark. There is a lot of mud," Severino said. "There is no way to survive under that material."
The nearby area is sparsely populated, mainly by people who work for the mining company.
Civil defense teams have been dispatched but it hard to reach the affected area because of all the mud, Minas Gerais governor Fernando Pimentel said.
The mining company Samarco, which operates the site, had yet to confirm whether there were fatalities or injured.
Samarco is jointly owned by two mining giants, Vale of Brazil and BHP Billiton of Australia.
The surface area of mud held back by the dam that gave way is equivalent to 10 football fields. Twenty-five people worked there, said local mining union leader Ronaldo Bentro said. He earlier gave the death toll as just one person.
The dam broke about 4:20pm (local time) between the old colonial towns of Ouro Preto and Mariana, in a major mining region.
Firefighters and other emergency teams rushed to the scene and residents were ordered to evacuate.