Vale confirms arsenic found in water days after Brazil dam burst

(Adds prosecutor in Minas Gerais state cites results of another study, paragraph 5)

RIO DE JANEIRO, Nov 27 (Reuters) - Toxic materials such as arsenic were found in the water of the Rio Doce river days after a dam burst at a mine in Brazil earlier this month, an executive for Vale, the co-owner of the mine operator, confirmed on Friday.

Vania Somavilla, sustainability chief at Vale, cited a report by the Institute for Water Management in Minas Gerais, which found levels of arsenic above legal limits.

Vale is the first of the co-owners of iron-ore miner Samarco to admit that some tests had found toxic elements in the water of the Rio Doce river after the dam was breached. Samarco was operating dam when it burst on Nov. 5, triggering a mudslide that wiped out the nearby town of Mariana and flooded the Rio Doce river.

The Brazilian federal government and two states affected by the disaster said on Friday they will sue Samarco, also owned by the world's biggest miner BHP Billiton Ltd , for 20 billion reais ($5.20 billion) in damages and clean up costs.

The Minas Gerais state prosecutor's office on Friday said that results from another laboratory study showed levels of heavy metals above legal limits in the river.

The clean up of one of Brazil's main rivers could take a decade or more, authorities and environmentalists said.

Somavilla told a news conference in Rio de Janeiro that the material had not been in the mining waste stored in the dam but might have been flushed into the river from the surrounding area by the mud flow.

($1 = 3.8449 Brazilian reais)

(Reporting by Stephen Eisenhammer; Editing by Jeffrey Benkoe and Grant McCool)