The Panasqueira mine is a world-class tungsten mine and probably one of the most important in Europe, having been continuously in operation since 1898. Between 1927 and 1996, the ore was fully or partially processed in a processing plant located on the left bank of the Zêzere River. The tailings were stored along the bank, in an extension of about 1.5 km. The fine particles, locally known as 'sludge', were stored in a self-constructed embankment located on a steep hillside. The current average slope is about 36°. The sludge has high concentrations of some heavy metals (Cu, Zn, W and Cd) but has a particularly high concentration in arsenic (about 15%). This tailings storage was not included in the National Plan for Rehabilitation of Abandoned Mines, despite presenting a high environmental risk. A quantitative environmental risk assessment characterises this situation, considering two possible alternatives: the current state with continuous release of contaminants or, alternatively, the situation that would arise from an eventual collapse of the storage embankment. In the first situation, we used a classical methodology of risk assessment to estimate the concentrations of arsenic in the affected compartments using a conservative exposure scenario and inferring the doses to which the local population is subjected. These doses are compared with reference acceptable values. In the second situation, the creation of a dispersed source of contamination encompasses a much higher dispersion area, a larger population and more expensive rehabilitation costs.