Nov. 11 (Bloomberg) -- Brazil’s Energy Minister Edison Lobao said wind, rain and lightning probably caused a blackout that plunged 40 percent of Brazil into darkness last night, hurting output at Vale SA, Gerdau SA and Petroleo Brasileiro.

The power failure, which affected 18 of 26 states and lasted as long as 3 1/2 hours, occurred after a storm knocked out two transmission lines stretching from the 14,000-megawatt Itaipu hydroelectric dam. When an overloaded third line collapsed, a cascading effect ensued and Itaipu automatically shut down as a safety measure, said Marcio Zimmermann, chairman of utility Centrais Eletricas Brasileiras SA, or Eletrobras.

“One of the most perfect machines invented by humanity was the airplane, and the airplane sometimes falls,” Lobao said. “So, we can consider that what happened was an accident. It happens, all over the world.”

As Brazil prepares to host the 2014 World Cup and 2016 Olympics, and economic growth quickens, the blackout is sparking concern that its aging electricity sector won’t keep pace, said Adriano Pires, head of the Brazilian Center for Infrastructure. President Luiz Inacio Lula da Silva said the blackout shouldn’t spark fears of another energy crisis like the drought-induced shortages of 2001 that led to power rationing and slower growth.

Crisis in 2001

“What happened in 2001 was that we didn’t produce enough energy and didn’t have the transmission lines to link the entire system in Brazil,” Lula told reporters today in Brasilia.

Itaipu, which meets 20 percent of Brazil’s energy needs, said operations were back to normal at 6 a.m. local time. The Brazilian director of Itaipu, Jorge Samek, told TV Globo last night that it was the first time that transmission from the world’s largest dam by output was forced to shut down since power began to flow in 1983.

Rio de Janeiro was the only state left completely in the dark, according to the Mines and Energy Ministry. Rio de Janeiro-based Vale, the world’s largest iron ore producer, said the outage affected its southern system, where half of its mines are located, and it is assessing its losses.

Singer Madonna Ciccone, who’s in Rio visiting social projects and meeting government officials, had a candlelight dinner at a hotel in the Ipanema district where she’s been staying since Nov. 9, O Globo newspaper said. Thieves carried out muggings on city streets around the Maracana soccer stadium, and Governor Sergio Cabral deployed 300 extra policemen to maintain calm in Rio. Officials were still working to reestablish traffic lights at some intersections on Copacabana beach.

‘Disruptions’

“We can’t discuss growth plans if we’re facing electricity disruptions,” Vanderlei Macris, a lawmaker from the opposition Social Democracy Party, said in a phone interview. “Brazil has announced huge investments like building a bullet train and hosting the World Cup and Olympics. It seems the country isn’t prepared enough for investments of this magnitude.”

Rio’s international airport and the subway systems in Sao Paulo and Rio, the nation’s largest cities, were shut after the blackout struck around 10 p.m.

Cia. de Saneamento Basico do Estado de Sao Paulo, or Sabesp, urged residents to cut back on their water use after all of its water-treatment centers were shut down, limiting supply to 80 percent of demand. The system will recover when it’s fully replenished with water, Sabesp said in a statement.

Petrobras Operations

Petroleo Brasileiro SA, Brazil’s state-controlled oil company, said the blackout temporarily reduced output at its refineries. The company said in a statement that the impact wasn’t significant and its distribution network wasn’t affected. Gerdau SA, based in Porto Alegre, said its industrial units were affected.

In neighboring Paraguay, which is also supplied by Itaipu, energy is back except in Neembucu, the southernmost state, because a high-tension tower collapsed, said Gerardo Gonzales, communications secretary of Paraguay’s presidency.

The outage came three days after CBS television newsmagazine “60 Minutes” reported that hackers may have been behind two previous blackouts in Brazil in 2005 and 2007. It isn’t clear who caused those outages or what their motive was, CBS said, citing U.S. intelligence officials it didn’t identify.

“In the short term, it’s not positive for the government,” said Rafael Cortez, political analyst at Tendencias Consultoria. “There will be a discussion on the government’s efficiency in infrastructure.”

In July, Lula agreed to triple to about $360 million the amount Brazil pays each year to Paraguay for the nearly 95 percent of the dam’s annual output it consumes, ending a dispute between the two countries over who benefits more.

To contact the reporters on this story: Joshua Goodman at jgoodman19@bloomberg.netAdriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net

Last Updated: November 11, 2009 17:37 EST