Dhaka, Sep 9 (IANS): The death toll from an explosion and fire at a ship-breaking yard in Bangladesh has risen to two, an official said on Monday.

At least 12 people were wounded on Saturday after a blast sparked a fire at a ship-breaking factory in Sitakunda on the outskirts of Bangladesh's southeastern Chattogram seaport city, reports Xinhua news agency.

Tariqul Islam, a resident physician of a hospital in Dhaka, told journalists on Monday that one of the explosion victims died early in the day while receiving treatment with 80 per cent burns at the Intensive Care Unit (ICU). He said another victim died a day earlier.

Bangladesh's Ministry of Industries has formed a committee to investigate the incident while operations at the ship-breaking yard have been suspended until further notice.

Bangladesh's Sitakunda sea beaches have emerged as one of the world's largest ship-breaking yards, with many European shipping companies sending their end-of-life ships for scrap in dangerous and polluting yards in the country.