RESPONSIBLE MINING INDEX 2018 A DISAPPOINTING REPORT CARD FOR THE WORLD’S TOP 30 MINERS

The Responsible Mining Foundation has just released its Responsible Mining Index 2018  after two years in development with extensive informed rounds of multi stakeholder comment. Rating the 30 largest mining companies worldwide responsible for 700 mining operations and undertaking a close examination of 127 mine sites in countries with significant income inequality, the results are sobering and disappointing for an industry that has long insisted on self-regulation.  Ultimately the index reflects a prevalent inadequacy of minerals resource governance in responsibly sourcing the minerals the world needs.  The purpose of the foundation and the index is not to berate but to encourage. It provides an authoritatively vetted map of what constitutes “responsible mining” and what standards can be applied to assessing a company’s practice with reference to those standards.  To the end of encouraging the index brings forward the unique company created initiatives which best illustrate policy harnessed to action.

These two aspects of the work are its greatest contributions to the pursuit of “Responsible Mining” as the shared global standard for all mining.

Where other codes articulate a range of standards, the RMF code emphasizes the measurable evidence of implementation: proof of  commitment, effectiveness of realization of the standards in practice, and accountability through public reporting of progress.   They specifically note that many have formally adopted policies mirroring the words of key  standards as official policy, especially on human rights and the rights of indigenous peoples but that few actually follow through on the commitment or track and report publicly on progress towards achievement of  responsible mining goals.  RMF is not hesitant to state that. The very low average scores, compared to what was a maximum possible score tell the story  of how far the industry as a whole is from “responsible mining” as the norm.

The following charts and quotes present key findings.  Current “Best Practice” as used by RMF is the scoring for those most exemplary corporate programs for each index component. ( In the report the company name is displayed by user selection of any given bar.)

 

RMI1

RMI2

 “The vast majority of companies have made policy commitments on topics such as business ethics, human rights, occupational health and safety, and environmental impact management. Beyond this, few companies can demonstrate that they have systematically operationalised their commitments into effective actions and fewer still show they are tracking their performance on these issues. In the absence of evidence of such efforts, commitments by themselves might appear as meaningless gestures or simply tick-box exercises.”

 

“The widespread existence of commitments on human rights is at odds with the fact that violations of human rights (including forced evictions, land grabs and violent attacks on community members) are among the ten most common types of severe impacts identified in the RMI research”.

 

“At the mine-site level, some of the leading practices on performance tracking and reporting are the direct result of conditions set by an investor or a producing country government. By contrast, few companies show they go beyond compliance to proactively disclose public-interest information, and fewer still take the lead to address emerging concerns, such as the impacts of mining on children, where external interest has been slower to manifest.”

 

“Only a small proportion of mine sites show evidence of reporting on matters of direct interest to mining-affected communities, workers and other stakeholders. This includes information on how a site performs on local employment, local procurement, grievance, water use and biodiversity impacts. For one-third of the mine sites assessed, no evidence was found of performance reporting on any of these issues. In the absence of publicly reported data, it is more difficult for companies and local stakeholders to develop trust-based relationships or engage in constructive discourse on issues of shared interest.”

 

“A few companies illustrate the use of open data principles to ensure the reported information is provided in a way that enables users to readily understand it and use it for meaningful assessment and comparison. Adoption of leading practice would ensure that data are disaggregated, provide regular or real-time information, allow change to be seen, allow users to understand the context, and are locally accessible and machine readable. Disclosure of public-interest data in an effective manner can help companies foster more informed engagement with their stakeholders, including governments, investors and civil society.”

 

While the performance stats are dismal the Responsible Mining Foundation finds in the few outstanding initiatives and the few very high scores n some elements by some companies the affirmation that responsible Mining is possible now everywhere.

 

“While individual company results still show considerable scope for improvement, the RMI-assessed companies have collectively proven that responsible mining is a realistic goal – it can be done. The RMI 2018 results show that if one company were to attain all the highest scores achieved for every indicator, it would reach over 70% of the maximum achievable score. This implies that existing best practice, if systematically applied by all companies, could already go some way to meeting society expectations.”

 

Mine Site Analysis Shows Extent of Shortfall On Responsible Mining Practice

The 127 mine sites were selected to represent those in areas with the greatest income disparity, 3 or 4 chosen from each company.  The rating categories are specific to the mine specific analysis and not included in the overall company scores.” These mine-site indicators help to shine a spotlight on how companies tackle some of the most important issues for workers, local people, local environments, and local economies. These indicators also give an indication of how consistently companies apply their policies and practices throughout their operations.”

“ it appears that no single company has an effective systematic corporate-wide approach to mine-site level reporting as none of the 30 companies assessed show consistent reporting across all the indicators and all the mine sites assessed.”

“Three indicators stand out because of the widespread lack of evidence found on performance tracking. These relate to performance of community and workers’ grievance mechanisms and biodiversity management; the vast majority of mine sites show no evidence of tracking the effectiveness of their work on these issues . More broadly though, the results for all six indicators show many sites providing no relevant information. Indeed, for approximately one-third (35%) of the mine sites assessed there was no evidence of any performance reporting on any of the issues. In general, very few companies provide information disaggregated by mine site.”

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Posted in Bowker Associates Science & Research In The Public Interest, Lindsay Newland Bowker, Mine Risk Management, Responsible Mining, Responsible Mining Foundation, Responsible Mining Index 2018, Uncategorized | Tagged | Leave a comment

CADIA TAILINGS FAILURE: THE BEST REGULATORY REGIME IN THE WORLD & RESPONSIBLE PRACTICE CANNOT GUARANTEE ZERO FAILURE

March 14, 2018 Stonington, Maine

contact: Lindsay Newland Bowker LNBowker@BowkerAssociates.org

Bowker Associates has not been able to piece together much of the history leading up to this failure nor much about the details of the two impoundments, the only tailings storage facilities for the Cadia Project which comprises 62% of Newcrest’s revenue.   In our tailings management focused work we often cite the exemplary national and provincial policies of Australia and in particular the regulatory framework of New South Wales (NSW).   While all that excellence didn’t prevent  quite a large slump in the south wall of the north impoundment, perhaps the forensics will show that NSW and national law and regulations for mining  did work to effectively minimize public consequence viz the immediate surrounding down slope community.

These are both impoundments of upstream construction. Australia  and ANCOLD have adamantly resisted any call for any form of prohibition on upstream construction or on adoption of all the Mt Polley panel recommendations as international standards.

A picture is worth a thousand words.  A big breach but  a nice neat slump of thick material.  It looks like perhaps a paste thickened deposition  and clearly no water cover.

18_03-Cadia-2-e1520841733486Aerial Photo Released By Newcrest

There was no runout or big slide so perhaps investigation will show that even without the south impoundment  the tailings would have made a nice neat slump with no run out, no liquefaction, no slide threatening or harming the downstream community.( NSW law and Newcrest business practices are insuring there is no risk of that and so far have detected no further movement in the wall)

So perhaps, hopefully, the forensics on this failure will ultimately bear out the wisdom that, as the Mt Polley panel urged, no large tailings facility should be conventional slurry and no large TSF should have a water cover during operation or have a wet closure.

Excellence in law and policy, we shall perhaps confirm, cannot achieve “zero failure” but it can perhaps consistently attain “zero public consequence”, zero  risk of harm to the surrounding community, zero public liability.

In our four tier severity rating system we have provisionally included this in the failures data base as a “3”..a minor failure meaning a runout less than 0.5k, a release of less than 100k, no deaths. It has a tentative public consequence score of “0” and that should be the aim of all practice and law.  Even if it turns out that the loss was preventable and forseeable, that will not change the severity designation nor the public consequence score.

There are questions that hopefully will be answered with full transparency through NSW’s exemplary investigation process as to whether this failure was preventable and the risk of breach discernible. How did Newcrest with everthing riding on the successful extension of mine life  from 2013 to 2030 come to still be relying on these two upstream impoundments with an original design life ending in 2013.  Was an increased rate of deposition a cause of failure.  ( Even paste needs time to settle and drain).  Newcrest apparently knew it had a tailings capacity problem and was looking at the feasibility of using the mined out Cadia Hill open pit for tailings deposition ( and is now looking to that as a way to get back into production as quickly as possible).

cadiafailedtsf

Newcrest Photo with long view of north and south impoundment and break (far left)

Whether it was preventable and foreseeable should matter in consequence to Newcrest and in the best of all possible worlds might have prevented the big 5% hit Newcrest has taken on its stock which will effect its entire portfolio until Cadia is back in production.

In Risk Management this would be an insurable loss ( business interruption)  and therefore a loss that could be covered through a reciprocal risk pool.  In a situation where a revenue interrupting loss occurs through no fault of, and beyond the control of the miner, there can and should be no interruption in revenue and if needed should provide  funding for repair or complete closure of the damaged facility as well as for all cleanup.  There wouldn’t need to be a hit to investors or the associated portfolio wide impacts Newcrest may be facing. ( We have no information  on what part of this may be insured .)

My advocacy, as a risk manager who has designed and managed a high risk owner controlled insurance program , OCIP, ( for NYC’s Water Tunnel construction) is that miners who actually are following best practice portfolio wide should have complete and low cost coverage for lost earnings and recovery when events that are actually accidents happen. ICMM could provide a useful leadership role or any group of miners ( eg those in the International Responsible Mining Assurance program) could form such an owner controlled insurance program.

In an OCIP the package of coverages are conventional with manuscript modifications suitable to the unique aspects of the exposure.  It can extend to all contractors and consultants as well lowering their overhead costs and thereby lowering overall costs of production .  It can include all portfolio projects which are also operated under the strict underwriting of the experience rated OCIP .

It could include as well the full costs of an unplanned closure necessitated by the failure or impairment.

Four years ago Bowker Asssociates took up this work in tailings secifically to assess whether the losses were insurable and therefore “poolable” or good candidates for an OCIP.  It became quickly apparent that the third party ( and most of the first party losses like business interruption did not meet the requirements of insureable risk”..they were all preventable, none of them acts of god or true “accidents”.

It also became apparent, because  insurers are not actively “partners” in big mine projects that there is no underwrting ..none of those monthly independent inspections and meetings with the insureds  involved.  An OCIP would build that  essential underwriting oversight  into all  covered projects.

If the OCIP ( whether as a reciprocal or through a global carrier) were large enough..covered enough of global minerals production then the participation in the OCIP would have other cost reducing , confidence inspiring benefits e.g. in issuing bonds for expansion on good terms and  meaning something in investment and investor analysis.

This is how financial assurance can and should work with respect to the liabilities, first and third party , from high consequence tailings failures.

Obviosuly the other side of the coin is that miners and project which don’t meet OCIP standrds shouldn’t be eligible for permits in the first place.  A project or a miner that can’t meet “insureable/bondable  standards” can’t possibly provide any meaningful assurance to the local community or to investors .

Financial assurance isn’t a meaningful or sensible expectation of miners and projects that are not economically sound.

The OCIP could give an extra discount for mines in jurisdictions like NSW with exemplary responsible permitting and oversight but it could still provide  coverage and sound practices whether or not the government regulatory structure is up to par.”  The OCIP could also influence governance by disallowing coverage in jurisdictions where provisions directly conflict with sound underwriting.

 

Back to Cadia, it is nor clear yet that this failure was unpreventable and unforseeable but investors and the local community can have confidence that ANCOLD, Australian Law and NSW law and regulations will arrive at a fully evaluated responsible conclusion and insure a safe ultimate disposition for these impoundmets and for Cadia’s long term tailings management.

That can’t be said of failures in most government jurisdictions.

****UPDATES & ADDITIONAL INFORMATION****

 

April 24,2018 Stonington, Maine

 

CADIA GAINS APPROVAL FOR PART OF OLD OPEN PIT FOR STORAGE

http://www.canberratimes.com.au/business/mining-and-resources/newcrest-confirms-tailings-solution-for-cadia-gold-operation-20180423-p4zb85.html

Cadia has gained regulatory approval to use 200 m of the mined out pit ad is awaiting approval for use of the other 300m . Approaching capacity at still operating north dam  which failed, Cadia had been exploring the in pit storage option with regulators but had not secured approval. This approval allows a restart  and investors have responded with an improvement in per share trading value.

In pit storage is a deposition method of last resort post failure or on reaching usable capacity at existing TSF’s.  It has not,until the world reached a global tailings capacity , been considered a desirable or permanent option for tailings management and presents many technical and safe containment hazards especially where he old pit has a flow through of groundwater and eventually with respect to overflow unless the pit is filled.  Tailings Info has a good basic summary of the pros and cons of in-pit storage

The technology and protocols for “best practice” are still emerging.  To our knowledge,the first major mine plan for which in-pit storage has been proposed at the outset is at the Langer-Heinrich Uranium facility , Paladin Energy Ltd (Paladin)  located in the Republic of Namibia in southern Africa where SRK’s 2015 plan addresses and proposes long term solutions.

We have not reviewed NSW regulatory standards and regs on in pit storage but in general their approval  deserves greater confidence than most jurisdictions.

OTHER POST FAILURE USES OF IN-PIT STORAGE

Imperial Metals resumed operations at Mt Polley with regulatory permission for temporary use of a mined out pit.  Those tailings are now being re watered  to facilitate pumping back to to the now buttressed failed dam. At the Fundao , still not approved for restart after the worst tailings failure in recorded history, Vale had contributed adjacent lands at its pit for deposition.  As we have written elsewhere at this website with supporting cited documentation, there was not adequate tailings capacity for the $3.2 billion expansion at Samarco .  Vale’s own consultants confirmed that as a significant red flag before Vale approved  the expansion.

These three failures, indeed most catastrophic failures, point to a global tailings capacity problem. where life of facility, height of facility, rate of deposition are exceeded and pushed by the hugely greater volume of tailings wastes due to falling grades and tighter margins.

POOR QUALITY OF ORES PUSHES TSF’S

Cadia East PC1 according to Macquarie hurdles standards is a reach in terms of economic viability as assembled by “The Angry Geololgist” (TAG), a reputable if somewhat colorful, tracker of the quality of drill reports.

 

hurdlechartswhichblockcavesmakethegrade

Investors who simply bounce back  when operations resume and an immediate tailings plan is approved  would be well advised to  undertake a more thorough  independent analysis  of economic viability of the present mine plan and technical viability of the proposed tailings .

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Posted in ANCOLD, Bowker Associates Science & Research In The Public Interest, Cadia Tailings Failure, dam failue envronmental costs, Environmental Risk Management, Financial Capacity Standrds Mines, financial risk and public liability, hurdle charts, ICCM Tailings Management Report, in pit tailings storage, Lindsay Newland Bowker, Measuring Magnitude of Consequence TSF Failures, Mine Risk Management, mineral economics, minerals waste management, Mining Financial Feasibility, Rate of Raise for Upstream Tailings Dams, Risk & Public Liability of Tailings Dams, Risk Avoidance & Loss Prevention Metallic Mining, Tailings Dam Failures, tailings dewatering, Tailings Legal Reform, Tailings Risk Management, TSF Design & Management Standrds, Upstream Tailings Dam Safety | Leave a comment

Time To House Clean For a Sustainable Viable World Minerals Supply

This appeared as a guest Column by Invitation at at Hallgarten March 7,2019.  I am honored to have what Bowker Associates has been reporting out through Bowker Chambers 2015, Bowker Chambers 2016 and Bowker Chambers 2017 understood by an analyst with as much distinction as Christopher Ecclestone.

Lindsay Newland Bowker

Stonington, Maine

March 7, 2017

 

 

After studying minerals waste management almost exclusively for 4 years from a perspective of governance, I see no easy fixes, no whole set of corrections. Yet I see no component (exchanges, resource assessment, permitting, planning, management) that is working as it should to provide the checks and balances needed to keep an efficient reliable supply of minerals to the world. The very nature of the minerals industry is a bad fit with all known models and traditions of governance and yet
the industry  is so deeply affected with a public interest beyond the worlds needs for minerals that sound responsible governance is essential. That can’t be entrusted to self -governance under negotiated terms.
It is often the case that by the time the entrenched practices and technologies essential to the economics of a given industry begin to cause real public harm necessitating correction by governance that what emerges as governance is not a result of systematic thinking and meaningful negotiation with the regulated industries. Law emerging in public anger and crisis often ends up only creating a
structure/framework for the ongoing polarities and conflicts of the debate rather than resolving or even understanding the fundamental problems. In many parts of the world this is playing out now in minerals governance in the form of reactive prohibitions.
Australia is the best model of “what could be” in minerals production governance. I am impressed with what I am beginning to understand about the supply side reforms China has undertaken. Both are a continuing process of systematic thinking, long term planning, active national mineral resource portfolio management aimed at an adequate within nation supply, an outflow of globally competitive mineral
product with an environment- and community-first standard.

Governance needs to start thinking about the set of mines it gives permits to as a portfolio that needs wise stewardship and management. It needs to work explicitly like a public private partnership because its output is required in all communities and an adequate, reliable supply matters.
There should be a solution but mining is so complex, so unique, so high risk and involves so much inherent uncertainty there are no exactly suitable models and traditions of governance that really fit. Utilities regulation and commercial goods transport are probably the closest. But even, if a model of governance could be put to paper and agreed to by all, where is the technical capacity to implement it?
Developing a mineralized deposit is far more complex than building a rail line or creating a distribution network for power supply. It requires specific, not generalized, expertise and field experience for every part. Even within the consultant autocracy the well of real talent is going dry. Old venerable company
names go on some pretty shoddy work these days. There isn’t enough talent to even do adequate self-governance so obviously it can’t be built into the system at the permitting level.

As you may have seen, Bowker Associates is advocating some version of “Buildings Codes & Buildings Departments” tailored to the unique qualities of mineral exaction and its waste management. That can’t be staffed or rely on the
consultant autocracy but whence cometh a cadre of professionals willing to be in governance? Though it aims only at “public safety”, only at the waste management part of minerals extraction, that may be enough to make a major part of the needed shift.
The investment and equity sector also needs its own reforms. Fitch gave a glowing endorsement to Samarcos $2.2Bn bond offering for its planned expansion in July of 2015, just 4 months before the worst minerals waste disaster in recorded history. BHP/Vale’s own retained Cause of Failure Expert, the elegant Dr. Norbert Morgenstern stated unequivocally that the failure event was already irrevocably
formed and advancing for a long time.

Day by day I see no match between what appears in enthusiastic
investment analysis and what I know of the qulaity and condition of the deposit and its infrastructure through authoritative assessment.

The entire industry is awash with memes & mayhem at the edge of the great minerals abyss.

Rio Tinto’s$38Bn aluminum acquisition error followed by the SEC charges of fraud alleging an attempt to hide a $3bn mistake in Mongolia while trying to raise capital on U.S exchanges is a sobering reality check that juniors are not the only poor performing high investor risk/high community risk part of the minerals
production industry. Even after OK Tedi, it had never occurred to BHP that a corporate wide tailings and waste policy made sense until they got a glimpse of the unexpected findings of their own cause of failure analysis for the Fundao.

It should be easy to fix.

The world actually does need minerals not just for “obnoxico” as Bucky Fuller
used to call much of what industry produces and consumerism adores but for essentials. Within the limits of existing proven technology there is an adequate supply in all minerals sectors at the global level.
Even economists like David Humphreys agree that there is no inherent conflict between environmental/community security and the minerals production the world needs.

Bowker Associates work has hopefully made it undeniably clear that the public consequence of minerals production grows astronomically as grades across the sector have reached the limits of presently known technology. The forensics on the failures we have mapped show that all was and is preventable not just unavoidable risk as the industry has tried to insist. There is no need for a local “sacrifice zone” to serve the larger good of the worlds needs for minerals.
Our most recent research (Dark Shadows) suggests that not more than 70% of all permitted mines are economically viable now and that many weren’t viable at permitting. Somewhere recently I saw an estimate by one of the big auditing firms that at least 50% of what is already permitted isn’t actually needed to meet world mineral needs. The other 50% aren’t just mistakes in judgment but a whole
industry within the industry where money is made until the game is up.

The consultant autocracy makes plenty on that not needed half of the minerals industry where individual sites are traded like commodities themselves even by top producers and the top 40.
As an analyst of large complex systems, I honestly have no idea how to bring about the big shift.

I have only this vague idea that it involves getting rid of the 50% of the minerals industry that is pure speculation and nothing to do with the worlds actual needs for minerals and that portfolio management at the national level, radical de novo, never done or tried supply side reforms in minerals resource
governance is the key to ongoing stability between supply and demand.

That’s not much of a start standing here at the edge of the minerals production abyss.

Posted in christopher ecclestone, mineral economics, mineral speculation, minerals waste management, supply side mineral reform, Uncategorized | Leave a comment

Path To Zero Failures “NET PLUS” Benefits In Mining Lies In Radical Reform of RESOURCE GOVERNANCE

The Following was addressed to Luke Fletcher, Executive Director of Jubilee Australia whose economics centered systematic approach to advocacy has always been exemplary and worthy of emulation.  Glad
to provide email contacts for those interested in following up with the several related recent in the news initiatives mentioned in the missive to Luke.
Lindsay Newland Bowker
Bowker Associates Science & Research In The Public Interest
LNBowkerAssociates.org
Dear Luke,
The quality, clarity, and precision of your analysis  sets a high bar for all of us.  As a body of work, the projects you highlight in this remarkable annual report are evolving universal  modern terms for resource management policy. As Jubilee Australia so wisely and beautifully models, it is in the redefinition of natural resources policy that the broad reforms we all seek in the name of “responsible mining” and “sustainable mining” will be achieved. That of course includes a complete revamping of attending  fiscal policy away from production volume only and toward a more  deeply informed policy on the distribution of costs and benefits.
Globally, as we map in our latest partnered work with David Chambers, present “production volume focused” policy  governing almost all legal frameworks and their attending fiscal policy has created a portfolio  in which less than 70% of all approved mines are actually capable of  production at all unless new higher grade discoveries are made or viable new technology emerges.  We have shown that mines that are not economically viable and were not viable at the time permits were issued (eg Mt Polley),are the main source  of the  world’s permanent catastrophic loss to culture, community, environment and impairment of other essential uses of land and water.
Since publishing a few weeks ago, I  saw and widely distributed  a research report  concluding that only 50% of the mines in the world’s‘pipeline of mines “in development” are actually needed to meet world needs for  metals, fertilizers and hydrocarbons.  The other 50% fostered and facilitated by  present prevailing legal frameworks is  only about speculation and profiteering and nothing to do with actual global needs.  The value that is added for speculators and profiteers is through the granting of the permit, the unfettered exchange of the permitted entity with its value adding  permit status intact and in the structure of law that allows the trade  not just of the extracted commodity but of the mine itself as “commodity”.
Our latest  findings suggest that every nation, every community can formulate a resource management policy on the terms you and others have begun to map out that in aggregate will supply all the metals, fertilizers and hydrocarbons the world needs within a “zero failures”, “zero harm” mandate. Perhaps you have seen Andrew Bauer’s ( Natural Resources Governance Institute) exemplary work on this kind of rethinking and revamping for the Northwest Territories in Canada.
Policy reforms, including the Mt Polley expert panel recommendations on tailings management and those parts of it endorsed in the recent UNEP report and the reformulation of Initiative For  Responsible Mining Assurance standards (now under leadership of two of the world biggest polluters)  that don’t address the need for a fundamental shift  on resource management policy  offer incomplete solutions that will not prepare us  for this new era of  low grade mining that is already well underway and for which there is no present  proven technical capacity.
You have gone a long way toward mapping the route and foundations needed for a the radical restructuring of law and policy we must accomplish to prepare for what lies ahead for the next two to three decades of human history and resource extraction.  You are right in your analysis of the deep flaws in the World Bank drafted Mining Law for Bougainville that sound resource management policy  begins with the granting of mineral rights  and the consideration of whether that use will benefit the local community  and fit harmoniously with that community’s overall vision of its own economic future.
 
Thank you, Luke. Thank You, Jubilee Australia!!!
 
Lindsay Newland Bowker, CPCU, ARM Environmental Risk Manager
Bowker Associates
Science & Research In The Public Interest
15 Cove Meadow Rd.
Stonington, Maine 04681
LNBowker@BowkerAssociates.org​
———- Forwarded message ———-
From: Jubilee Australia<inquiry@jubileeaustralia.org>
Date: Sun, Nov 19, 2017 at 8:00 PM
Subject: Jubilee Australia Helps Launch Australia Corporate Accountability Network …
To: Lindsay Newland Bowker <lindsaynewlandbowker@gmail.com>

Dear Lindsay,

Two weeks ago in Melbourne, Jubilee Australia was at RMIT in Melbourne for the launch of an exciting new project: the Australian Corporate Accountability Network.

Jubilee has played a crucial role in setting up this network and our Business and Human Rights Advisor Brynn O’Brien, who is on the network’s secretariat, addressed the launch event.

We have big hopes that this new project will be able to shine a brighter light and ultimately hold to account any Australian companies committing human rights violations and environmental damages either at home or overseas.

ACAN_Launch_RMIT_-_small.jpg

Caption: From left Michelle O’Neil (Textile, Clothing and Footwear Union of Australia) Catherine Coumans (Mining Watch Canada), Serena Lilywhite (Transparency International Australia) and Shelley Marshall (RMIT) discuss the potential for better corporate accountability in Australia.

 

Here is a snapshot of what we have already accomplished this year:

And here is just a few of the projects that we are working on now:

 

Stay tuned to hear more about all these issues in the near future. We can continue to carry on this important work with your generous continued support. All donations are tax deductible.

 

Luke Fletcher

Executive Director, Jubilee Australia

Jubilee Australia engages in research to seek reform of Australian government and corporate practices, and of the global financial system, to support community wellbeing and a just, sustainable, global economy.

Unsubscribe

Contact us:
PO Box 20885 World Square NSW 2002
Email: luke@jubileeaustralia.org
Website: www.jubileeaustralia.org

Lindsay Newland Bowker <lindsaynewlandbowker@gmail.com>

9:39 AM (4 minutes ago)

to david.winning
David,
Understand Rhiannon is still on maternity leave.  Her instructions are to forward to you.  Happy to assist on background, sources contacts of you are interested in this area and this subject.
Lindsay
Lindsay Newland Bowker, CPCU, ARM Environmental Risk Manager
Bowker Associates
Science & Research In The Public Interest
15 Cove Meadow Rd.
Stonington, Maine 04681
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Posted in Andrew Bauer, Bowker Associates Science & Research In The Public Interest, David M. Chambers, Jubilee Australia, Lindsay Newland Bowker, NET PLUS BENEFIT EXTRACTION POLICY, Resource Governance, Uncategorized, UNEP TAILINGS MANAGEMENT REFORMS | Leave a comment

Building Codes & Building Boards BEST MODEL For Regulatory Reform In Tailings Management

 

 

There are companies, consultants and regulators around the world that have a high level of commitment to tailings dam safety and have developed practices which have been instrumental in ensuring the safe operation of tailings dams by many companies in many countries. Their experience should be taken advantage of in striving to further improve industry’s performance through the development of a comprehensive Tailings Responsibility Code that will establish well defined standards of practice, provide detailed audit protocols and require third party audits, all of which should be made available to stakeholders in a transparent manner. Henry Brehaut Key Note Address Tailings& Mine Waste  2017 Banff Nov5-8 2017

 

Though there was too much industry control when the then existing UNEP Metals & Mining  division created the cyanide code to address public alarm at the frequency and consequence of cyanide heap leach failures and head off outright cyanide bans, I do believe that a mutually informed all stakeholders code in local/national law that does as the Mt Polley Panel advised  and UNEP has endorsed  to put  safety first is the way to go.  Global organizations need some uniformity in code and regulation to function.

 

The legal model that works best for that is  the universally familiar  “buildings code” model  under a separate enforcement and oversight structure.  That is what Tailings Management needs..not just for tailings dams but for all means of deposition. That model works through a legally established building code with checks and balances in its  governance and enforcement structure.

Through buildings codes and professionally staffed Buildings Departments urban areas have accommodated ever higher buildings and ever more creative engineering designs for high rises that provide for innovation and advancement and a means of always being in tune with innovation & advancement through code revisions and the statutorily provided  process for that.

 

The Buildings Codes/Building Department model  forces accountability to best practice, to the costs of  managing tailings to best practice and to a means of insuring that best practice keeps pace with innovation and new research . 

 

The Buildings Code/Buildings Department model also works for investors, insurers , sureties and lenders as it provides a built in “underwriting” process  where  competence and ongoing professional development of all inspectors and each key position is defined in law.

 

I recently heard from a research team looking at how to reorient taxation for mines to better capture revenue and fund capacity focused on the public liability center of mining..its waste management practices.

 

Together these two shifts in public policy would more or less cure the loss prevention dilemma built into almost all the legal code for mining world wide.

 

The big question, is where is the professional capacity to make this work. ?  Does it actually exist presently within top producing companies with major international tailings portfolios, let alone regionally resident in adequate numbers relative  to the size of existing and planned tailings facility portfolios?

 

Jack Cadwell has written that even among the top 40 there are  too few qualified tailings management engineers to cover a given company’s global portfolio of  tailings facilities and that many, like BHP as of Samarco, have non at all relying completely on consultants .  In the long dry time prior the supercycle  professional competence was stripped to bare bones everywhere.  As we lay out piece by piece in our new paper the industry globally  gave us all time highs in consequence by rushing to maximum production from this bare bones place.

 

I wonder in the agenda or in lunch discussions there at Tailings 2017  whether is any actual  realization of this massive gap in technical competence or any plans afoot on how to build it?  Is anyone talking about how to build  professional development and competence to enforce and oversee an international tailings code?

 

 

 

 

 

Posted in Bowker Associates Science & Research In The Public Interest, Henry Brehaut, Jack Caldwell, Lindsay Newland Bowker, Mt Polley Expert Panel Reccommendations, Tailings & Waste Management 2017, Tailings Legal Reform, Uncategorized | Leave a comment

UNITED NATIONS ENVIRONMENT PROGRAM TAILINGS MANAGEMENT REFORMS SHOULD BE PUBLICLY  ACCEPTED BY MAC & ICMM AND PRESENTED AT TAILINGS 2017

FOR IMMEDIATE RELEASE  Stonington Maine November 1, 2017

CONTACT: Lindsay Newland Bowker, LNBowker@BowkerAssociates.org +1 207 367 5145

TAGS: UNEP Tailings Management Report; Reform Of Legal Framework for Tailings Facilities; Tailings Conference 2017; 2nd Anniversary Samarco TSF Failure; Mt Polley TSF Failure Management & Closures; Mining Watch Canada; London Mining Network; Amnesty International;Tailings Risk Management

Last week  the United Nations Environmental Programme (UNEP) released its call for reforms in the legal framework for oversight of tailings facilities. The report was endorsed by an international coalition of NGO’s who have been active for many years providing competent and thorough documentation on local public consequence from many aspects of mining activities.  The endorsing coalition included Mining Watch Canada, The London Mining Network and Amnesty International.   The report comes after  two  years of non-governmental response to the full program of reform recommended by the Mt. Polley expert panel. Here at this forum are several posts chronicling in some detail the response avoidance initiatives  of the Mining Association of Canada ( MAC) the International Council on Mining & Metals ( ICMM) and even the British Columbia government itself who sought the recommendations when it commissioned the Mt Polley panel.

The catastrophic failures phenomenon is world wide as illustrated in the spectacular graphic superimposing  failures by severity on a map of the world. As as we document in our latest research in partnership with Dave Chambers, scale of impact  of catastrophic failures has reached all new magnitude and the highest frequency of occurrence ever.   No  government in the world has enacted any meaningful reforms either.

Bowker Associates  had no part in developing the UNEP report or writing its promotion  though our data base ( Bowker Chambers TSF Failures 1915-2017 was the source of reported data and charts.  We are very glad of, and wholly endorse this united global expression of refusal to accept the program of non reform held fast by MAC, ICMM and all nations but Australia who offer many excellent models all should look to.

This step of united global expression of the public interest has claimed global ownership of  the narrative on public interest consequence, including human rights and social consequence, especially to the lands and communities of indigenous peoples.  The coalition is at work continually in a living collaboration but this is the first formal public expression  Of widely shared views and advocacy.  And of course UNEP is a natural global umbrella for that united advocacy.

Neither the mining industry, its lobbies MAC and ICMM nor any government  with an active  resource policy in support of mining can debate or duck the four main UNEP calls for action by governments issuing permits: (1) call for an official public policy of loss prevention with a goal of zero failures ;( 2) the Mt Polley core mandate of safety above economics and cost as a foundation stone of all public policy; (3) the obligation of each government issuing permits to provide a complete available on demand public data base on all tailings facilities under their jurisdiction; (4) the obligation to provide checks and balances protective of the public interest through independent expert review of all aspects of facility design management oversight and closure especially  with a bearing on public liability and public consequence.
There is great and reasonable frustration in the public interest sector globally that ICMM, and MAC and governments like BC Ministry of Mines have taken a watered down chinese menu approach to the wisdom of the Mt Polley Panel recommendations .  The core recommendations cited above are based on the Mt Polley expert panel reccommendations. As Dave Chambers & I warn  in our industry peer reviewed new paper just published in Environments , the continued avoidance of a full commitment to all the Mt Polley recommendations as policy in all legal frameworks will just spawn a wider tide of reactive populist anti mining legislation as was just brought into existence by a state wide coalition of NGO’s here in Maine( LD820).
Mining Watch Canada, who have been the gold standard for impeccably good research  as the foundation for their advocacy, has already endorsed  the same reactive populist call as Maine for upfront security  in the amount of a worst case scenario  That is not a worthy advocacy but it reflects popular thinking and is what the mining industry will continue to invite  if it doesn’t heed  the call for every nation to reframe its law from scratch embracing the 4 foundation stones advocated by UNEP and the full menu of Mt Polley recommendations, not just for new projects but in application to all existing TSF’s and ATDS( Alternative Tailings Deposition, such as in pit or underground workings deposition, use of caves or natural underground openings, use of marine environments ( lakes, rivers, streams, bays and ocean)).
 The Mt Polley expert panel did not address human rights and social impacts reforms or the need for miner funded immediate mobilization for relief , assistance and compensation in the wake of catastrophic failure because they were working under a framework  that contractually focused their  scope.  UNEP is the first government entity to demand that all legal frameworks for mining  include creation of a global disaster relief fund, presumably miner funded and contributions mandated by law in all permits.
This is UNEP’s central mandate all over the world and they were on the ground and present post Samarco as a voice of truth against the manufactured narrative in the wake of the Samarco man made disaster in Brazil.  I had advocated here in Maine that companies on government divestment lists and on the World Banks “black list” be specifically disallowed as applicants or having any control or directive role in any aspect of mine operations.  Had I been involved in the preparation of this report I would have recommended that inclusion.
Bowker Associates endorses a more complete legal framework in all permitting regulations addressing human rights , including locally expressed standards  of community and environmental security and requiring a fair level of contribution via the local government to emergency response for all high hazard facilities. Spill response laws are not adequately conceived or framed to respond to catastrophic tailings facility failures.
Each of the main endorsing NGOS ( London Mining Network, Mining Watch Canada and Amnesty International) have done work of impeccable quality in documenting mine specific public interest consequences of mining practice and Bowker Associates fully embraces their consensus on these mandates of reform in all legal frameworks for mining.
I was very glad to see Mining.com’s brief but balanced coverage  of the UNEP report and it has been reported in several other mining  media as well including investment analysts websites.
It would move the conversation and the continuing informed mapping of the public interest if  MAC and ICMM immediately concede and endorse these five  main recommendations in advance of, and at , Tailings 2017, Alberta November 5-8.
Jack Caldwell has updated his planned presentation in recognition of the UNEP, including its global map of failures post Mt Polley and in recognition of our latest paper.
Lindsay Newland Bowker, CPCU, ARM Environmental Risk Manager
Bowker Associates
Science & Research In The Public Interest
15 Cove Meadow Rd.
Stonington, Maine 04681
LNBowker@BowkerAssociates.org

 

Posted in Analysis TSF Failures, BHP, Bowker Associates Science & Research In The Public Interest, Brazil Tailings Dam Failure Risk, Canadian Mine Risk & Loss Profile, Catatrophic Tailings Dam Failures, Causes Of Catastrophic Tailings Dam Failures, Center For Science in Citizen Participation, David M. Chambers, Environmental Risk Management, financial risk and public liability, Fundao Talings Dam, Germano Tailings Dam Failure, GO NO-GO Technical Framework, Jack Caldwell, MAC/CDA Tailings Guidelines, Measuring Magnitude of Consequence TSF Failures, Minas Gerais Mining Oversight, Mine Disaster Recovery, Mine Risk Management, mineral economics, Mining Watch Canada, Mt Polley TSF Failure, Mt. Polley, Public Liability & Financial Risk, Rate of Raise for Upstream Tailings Dams, Uncategorized, UNEP TAILINGS MANAGEMENT REFORMS | Leave a comment

TSUNAMI OF PHOSPHATE TAILINGS FROM ICL PLANT INUNDATE 20KM OF DRY VALLEY NEAR DEAD SEA

ICLfailure6302017israel

A collapsed wall of a reservoir holding a highly acidic wastewater is seen in Mishor Rotem, in Southern Israel July 4, 2017. REUTERS/Baz Ratner

 

June 30th, MISHOR ROTEM ISRAEL

 

“Toxic wastewater that surged through a dry riverbed in southern Israel at the weekend left a wake of ecological destruction more than 20 km (12 miles) long.

“The flood began last Friday when the 60 meter (yard) high wall of a reservoir at a phosphate factory partially collapsed, letting loose 100,000 cubic meters (26.4 million gallons) of highly acidic wastewater in the Ashalim riverbed. One section of the Ashalim riverbed is made up of narrow canyons, popular for hiking, but no one was around when the wastewater first gushed through”

 

“Israel’s Ministry of Environment has opened a criminal investigation into the plant’s owner, Rotem Amfert, and its parent company Israel Chemicals (ICL), a leading potash and fertilizer producer with exclusive rights in Israel to mine the Dead Sea.

“All the plants and animals in the valley during the tsunami of acid were probably highly damaged, probably dead,” said Oded Netzer, an ecologist for the ministry. “In the long term, there will be soil damage and large functional ecological problems.”

He said weeks of intense clean-up work, including pumping out small pools of the wastewater that remain along the path, lay ahead, and complete rehabilitation would likely take years.

ICL has stopped using the series of reservoirs where the breech occurred. They contained a production by-product called phosphogypsum water.

The company declined to answer questions on the criminal investigation or about the impact the incident will have on its operations.

Shares in ICL fell almost 4 percent after the spill but partially recovered to trade 1.3 percent higher on Tuesday.

In a statement, Rotem Amfert said it was working “around the clock” in full coordination with authorities, and it would spare no resources to clean up the riverbed.” Ari Rabinovitch for Reuters, July 5th http://www.reuters.com/news/archive/environmentNews

“Israel Chemicals first identified the spill at 11:45 a.m. on Friday (June 30, 2017), after workers found a hole in the eastern embankment of the Rotem Afert plaster pools, which allowed “plaster water” to leak into both pool #4 at the factory and part of Nahal Ashalim, the company said. Plant workers arrived quickly and stopped operations of the relevant facility and the sewage flow, the statement added.

“On Saturday afternoon, the INPA said its teams were scanning areas along a 20-km. strip from the Mishor Rotem area to the Ashalim reservoir, which included numerous basins created by “the tremendous sewage flow.” The flow was so strong at times that water levels reached as high as 4 meters in some of the channels, the authority reported.

“At the same time, inspectors were working to keep animals away from the water and prevent the entry of hikers, because the conditions could be very dangerous to them, the INPA warned. As of late afternoon, the authority said there was still considerable sewage flow in many of the streambed’s channels, as well as a large amount of foam and sludge forming in the very wide opening of the channel.

icl6302017israel3Meanwhile, the Environmental Protection Ministry said it had ordered the Rotem Afert factory to cease pumping wastewater into its pools until the ministry is convinced that such an event would not reoccur.

“We estimate that we will complete the samples and measures in the field by the end of the day, and then we will be able to complete the mapping and estimate the initial damage in order to examine and plan with the rest of the authorities how to continue to handle the area from this point on,” Gilad Gabbai, director of the INPA’s southern region, said on Saturday.

“It is important to emphasize to travelers that they should not come to the area until further notice, because it could be very dangerous for them. We estimate that the rehabilitation in the field will take at least a few weeks.” Jersusalem Post   Read more: http://www.digitaljournal.com/news/environment/tsunami-of-toxic-wastewater-inundates-israel-desert-over-weekend/article/496912#ixzz4m5qUa6On

PHOSPHATE TAILINGS A GREATER RISK & GREATER CHALLENGE THAN METALLIC TAILINGS

Here is a description of the process and some of the difficulties managing “plaster pools” as they are often called during operations and how difficult they are to close. A ton of tailings is create for every ton of phosphate produced.

http://www.fipr.state.fl.us/about-us/phosphate-primer/process-water/

“If one of the operating plants is shut down and it is necessary to close the phosphogypsum stack and pond water system, the water in inventory must be treated before it can be discharged. The volume of water that would need to be treated could be as much as 2 to 3 billion gallons. The process water has a low pH of about 1 to 2 and contains a dilute mixture of phosphoric, sulfuric, and fluosilicic acids. It is saturated with calcium sulfate and contains numerous other ions found in the phosphate rock used as a raw material, as well as ammonia from the solid fertilizer manufacturing process.

ICL6302017israel2.png

A Re Examination of How We Provide Phosphates For Fertilizers

http://phosphorusfutures.net/the-phosphorus-challenge/the-story-of-phosphorus-8-reasons-why-we-need-to-rethink-the-management-of-phosphorus-resources-in-the-global-food-system/

Israel Has Lower Grades & Higher Costs Than Other Phosphate Producing Nations

http://pdf.usaid.gov/pdf_docs/Pnadw835.PDF

ICL Has Implemented a Filter Press Back Fill System At Its Boulby Mine In Cleveland UK

http://www.tailings.info/casestudies/clevelandpotash.htm

Andrew Fourie’s latest paper is on the use of Potash tailings for backfill but we have not had an opportunity to read it.  Due to cost, Boulby did not use any other fillers.  A recent study presented at Marrakesh 2011 concluded that Portland cement was an essential component to the successful long term performance of potash based backfill.

Deposition of phosphate slurry into the sea was common practice until the use of the tailings impoundments .

In the U.S. the western states use underground extraction where backfill might work but in the eastern U.S. most extraction has been by open pit.

There Are Alternatives to Semi Liquid Deposition of Phosphate  Tailings

http://www.golder.com/sa/en/modules.php?name=Publication&sp_id=238&page_id=&service_id=53

 

 

Phosphate Tailings Have a Higher Severity Profile Than Metals Floatation Tailings

The ostensible goal of all slurry deposition of tailings is a dry stack within the impoundment that is stable, non permeable and without seepages. Metal slurries are 68% solid, however, phosphate slurries are only about 3% solid at deposition and never attain a dry state with its own internal structural integrity. As compared with most metal slurries from concentrators, phosphate slurries are characteristically more toxic.

Classified as “Serious” per Bowker Chambers severity classifications based on the described “100,000 M3” release . Images and descriptions suggest a much larger total releases volume. By the Rico-Benito formula the estimate is in the range 700,000 to 1 million m3 for a 60 meter high dam with a 20km runout.

 

Timeline  Details on Criminal Investigation Of  Rotem Afert

http://www.sviva.gov.il/English/ResourcesandServices/NewsAndEvents/NewsAndMessageDover/Pages/2017/07-July/Acid-Spill-Causes-Ecological-Disaster-in-Judean-Desert.aspx

This link includes video of the release as it occurred and images of the scoured river bed.

The MoEP has launched a criminal investigation against managers from Rotem Amfert and its parent company, Israel Chemicals Ltd. This after a hearing was held at the MoEP’s Southern District office, headed by Baruch Weber.

The Ministry’s Green Police will lead the probe, which will include series of investigative actions against corporate officers.

During the hearing, ways in which the Rotem Fertilizers plant could refrain from activities that could cause additional environmental damage were examined. It should be noted that the MoEP ordered the immediate discontinuance of the use of evaporation ponds 1 to 3, where the collapse occurred. The MoEP has ordered the use of a temporary pond until it is satisfied that the factory’s operations will not create additional environmental hazards.”

 

 

 

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Will add more information on history & severity of phosphate tailings failures in history and add correct photo credits for the two additional photos above. Will also post here new information as it develops including on the criminal investigation of ICL subsidiary Rotem Afert for  this failure.

 

 

 

 

Posted in ICL Waste Dam Failure, Mishor Rotem Israel, Phosphate Tailings Failures, Rotem Afert Crminal Investigation, Rotem Amfert Nedev, Rotem Arfert, Uncategorized | Leave a comment

AS METALLIC MINING ENTERS ALL NEW ERA OF UN MAPPED DIMENSIONS AND OUTCOMES FATE OF SOME 30% OF ALL “ACTIVE” MINES NEVER VIABLE OR PRESENTLY NOT VIABLE ACCRUING PORTFOLIO OF PUBLIC RISK HANGS UNEXAMINED AND UNADDRESSED

In the shadow of the “supercycle”,[1] and propelled by its dysfunctional economic dynamics, risk and public liability from mine tailings storage facility (TSF) failures have reached all-time highs. The annual failure rate for significant TSF events has escalated from a 50-year average of 0.56 “Very Serious“[2] TSF failures per year (33/50) to 1.0 (10/10) for the period of price run up 2000-2010 as described by the HHWI (Rossen, Anja 2015), a 78% increase. In this period, copper prices steadily climbed reaching an all-time post war3 high of $9411 per ton ($2015) in 2011 as compared to the prior 50 year average price of $5133. These facts challenge the widely held notion that failures are mainly shaped by falling prices. They point to more fundamental and still not fully examined or understood root causes of TSF failures.

 

What is apparent in the forensic record is that the increasing severity and frequency of high consequence failures reflects in part an aging infrastructure at depleted mines which are no longer economically viable even at record high prices. There are also indications that many were never viable and were just abetted into existence through venture capital on loosely regulated exchanges or advanced on faulty feasibility studies.

What seems apparent and even widely understood within the industry, though not yet widely acknowledged, is that we have reached the outer limit of the mining industry’s long standing metric that ever lower grades of ores can be mined through “economies of scale”. A close examination of the data seems to show that the “mining metric”[3] stopped working sometime in the mid 90’s. It is from this turning point in the efficacy of the mining metric that conditions which evolve to catastrophic failure began forming, incubating and progressing. During the supercycle as prices climbed to all-time post war highs, grades, even at major producing large mines, dropped to all-time lows. Meanwhile mines still premised on this economies of scale model continue to be put forward with unverifiable claims of economic viability, or with a reasonable expectation of full compliance with external environmental and other community protective standards.

The data increasingly dictate that we need a completely new approach to navigate this new era of mining. We need action to identify and correct already accrued public liability the end of this era has left behind in standing operating TSFs. This can only be accomplished through the application of comprehensive law and policy addressed to these two imperatives. The fragmented legal frameworks for mining in most prevalent use today globally have conclusively demonstrated their failure to adequately protect the public interest. Post Mt. Polley, and now post Fundão, none of the much publicized government and industry studies and reforms announced address the key root causes of high severity high consequence tailings failures or commit to any changes in law and policy that will be effective in preventing the man made losses in existing, not yet closed marginal mines.

This is the introduction for our soon to be released new research on how the longest and biggest price rise in recorded history created the biggest elevation ever in portfolio risk , not just on the public liability side as measured in trends of TSF failures but on the investment side as well.

Here are a few of the highlights of the dysfunctional and damaging economics of the supercycle.

 

The Co-Entanglement of Supercycle Economics & TSF Failures

 

It is irrefutable that the frequency and consequence of Very Serious Failures and of “Serious”[4] Failures is continuing to increase at alarming rates, that the trend emerged and grew post 1990 and that it is in large part a consequence of conscious decisions made at the mine-level to make up for fundamental mine and miner specific economic disadvantages viz global economics. Short cuts on waste management, especially of tailings management, were and are a fast, easy, under the radar way to try to meet the high production volumes and low cash costs investors insist on (Bowker & Chambers 2015, Bowker & Chambers 2016).

 

The dysfunctional, reactive economics of the supercycle are expertly analyzed and well characterized by Deloitte in their 2014 market trend analysis.In their relentless pursuit of growth in response to pressure from investors and analysts, companies developed massive project pipelines. Some also developed marginal mines, hoping commodity prices would buoy poor project economics. In their headlong pursuit of volume, many mining companies abandoned their focus on business fundamentals. They compromised capital allocation decision making in the belief that strong commodity prices would compensate for weak business practices. Rather than maintaining a long-term view of the market, many acted opportunistically.”(Deloitte 2014).

Price Waterhouse Coopers, looking at the performance of the top 40 over the supercycle, note that much of the massive commitment of capital to expansion and production at any cost ended up as impairment write offs: “… from 2010-2015, the top 40 have impaired the equivalent of a staggering 32% of the capex incurred”. They note that $36 billion, or 68 % of the total impairments, were taken by Glencore, Freeport Vale and Anglo American and that “2015 saw the first widescale mothballing of marginal projects”. The top 40 took a collective net loss of $27 billion and investors punished them for “squandering the benefits of boom” and for “poor capital management and investment decisions“. (PWC 2016).

It is in this dysfunctional “maximum production at any cost” dynamic of the supercycle that we see a dramatic upturn in the frequency and severity of failures, and in which there is with very little doubt a higher global portfolio risk of accrued and unexamined public liability. Changes in waste rock to metals ratios for gold suggest the possibility of a more than 100% increase in the level of potential unexamined risk (SRS Rocco 2016).

The amount of capital just wasted during the supercycle would have gone a very very long way to correcting everything that needs correcting in all the pollution generating waste piles in all the mines in the world.  Instead it just became investor losses and unfunded mine catastrophe’s .
To achieve stability and a lower public liability profile the system does need to be cleansed of the 30% to 50% of mines that are no longer viable.  That is in the public interest.  That is a necessity for the mining industry.
To protect the public and communities in the sacrifice zone of potential catastrophe’s that cleansing has to be planned and orderly. The permitting jurisdictions who abetted these mines into existence need to share some of the financial risk and responsibility for this essential cleansing.  It cant just be a big shuffle of public risk to less and less competent, less and less well financed  or less reputable mine operators.

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[1] Supercycle refers to a multi-year period of sustained price increases in commodities and raw materials.

[2] We define “Very Serious” TSF failures as those involving a release of 1 million cubic meters or more

3 The all-time annual average high since 1896 was 1916 at $13,572 ($2015) followed by 1917 at $11,876

[3] The “mining metric” is higher mine production necessitated by lower grades of ore, a century of declining prices offset by declining costs per ton. The metric is to continuously develop the resource through economies of scale, larger and deeper footprints, more efficient operations, bigger and better bulk mining technology.

[4] We define “Serious” TSF failures as those with a release of greater than 100,000 m3, but less than 1 million m3.

 

 

Posted in Analysis TSF Failures, Measuring Magnitude of Consequence TSF Failures, mineral economics, Resources Policy, TSF Failures, TSF Failures Consequence, Uncategorized | Leave a comment

Root Causes of Tailings Dam Overtopping: The Economics of Risk & Consequence

Root Causes of Tailings Dam Overtopping: The Economics of Risk & Consequence

Lindsay Newland Bowker1 and David M. Chambers2

1Bowker Associates Science & Research in the Public Interest 15 Cove Meadow Rd Stonington, Maine 04681 USA lindsaynewlandbowker@gmail.com

2Center for Science in Public Participation 224 N. Church Ave. Bozeman, Montana 59715 USA Email: dchambers@csp2.org

ABSTRACT

This paper examines overtopping failures of embankments at tailings impoundments from 1915-2015 and compares the severity of consequence for overtopping failures to that of other causes of failure. We find that the distribution by severity of consequence for overtopping at active mines is not significantly different from any of the other established “causes of failure.” Further we find that the distribution by severity within and across all active TSF recorded failure causes (N=125) is also reflected in the mean distribution of severity for all of our recorded TSF failures (N=267) suggesting that a common root cause, rather than the individual causes of failure, may determine the severity of failure. We look here at the demonstrated link between severity of consequence of failure and the economic dynamics of the “Mining Metric” over 100 years (Bowker and Chambers 2015) as it applies to overtopping. We offer what is available from authoritative sources on the economics backstory of known overtopping failures and crises. We conclude that the deviations from best available technology and best applicable practices at the mine level are conscious choices driven by economics and that without a reframing of the professional, regulatory, and legal frameworks for mining these choices will continue to be made even where proven technology and new promising technology are available and better suited to a given mining asset. Solutions that will prevent mine failure require not only the work of evolving consensus on best available technology/best applicable practices, but also the recognition of root causes which build to catastrophic failure. A complete solution cannot be attained without accountability to best knowledge, best practice, best effective technology in mining law and regulation, as permit standards, as standards for oversight for life-of-mine and of life-of-tailings storage facilities.

rootcauses fig1

 

The BC Ministry of Energy and Mines, like most regulatory agencies, allows the dual use of the facility for storage of water. In May, 2014, prior to the dam failure, there had been an overtopping of the dam, but quick action by mine personnel prevented failure of the dam (Mt Polley Expert Panel 2015). Overtopping at Mt Polley could also have led to a dam failure, with similar damage as eventually occurred in the foundation failure in August in 2014.

 

Throughout Canada and all over the world new mines and new dams are approved within regulatory and legal structures that do not hold miners to best available technology and best applicable practices.  Until this changes, it is clear that the industry will not consistently choose best available technology and best applicable practices unless required to do so. Geoffrey Blight emphasizes this in his authoritative and informed re-visitation of several notorious failures, among his very last works and summing a life time of excellence and insight on design and management of tailings storage facilities (Blight 2010).

 

rootcauses tab1.png

 

  • Economic Root Causes of Well Known Overtopping Failures: Grade as a Key Root Determinant

 

The fundamentals of how this plays at the mine level is simply and succinctly expressed by Andrey Dashkov, Senior Analyst, Casey Research: “As a project moves to the development stage, the higher the grade, the more robust the projected economics of a project. And for a mine in production, the higher the grade, the more technical sins and price fluctuations it can survive.” (Dashkov 2013). Continuing in this analysis Dashkov goes on to declare that volume and throughput (the Scholz foundation for profitability of low grade mines) is “no longer king,” and that grade is “now king” in determining which mines will be successful and which will fail. This was essentially validated by Bowker and Chambers (2015) as the context and main driver of the emerging prevalence of catastrophic failure. This applies equally to failure by any of the 8 causes of failure, including overtopping.

 

Dashkov’s analysis that a grade advantage is a critical determinant of ability to survive serious technical flubs and dramatic unpredictable price fluctuations, a norm for all metals, means that smaller, lower grade mines will suffer more and have more physical manifestations of their economic stress than larger, higher grade mines. Very simply, smaller, lower grade mines operated by junior and midsize miners have no cushion. They have to ride too close to the edge of financial viability viz. global metals markets and major producers to stay in production. They also have less access to high quality capital markets, paying more and operating under more onerous terms of credit than the top producers at higher grade mines, a factor that George Ireland has frequently cited as creating financial instability and uncertainty when the due dates of credit don’t match up with cash flows needs, expected revenue generation, and production capacities of the mine. This mismatch can actually lead to failure or involuntary investor takeover elevating uncertainty and instability (Sylvester 2012).

 

In gold, as a respected analyst Mark Fellows explains, a 10% fall in global average ore grade gives rise to a $50/oz rise in average global production costs (Fellows 2010). At the mine level, a difference between a gold mine with 1.72g/t and 2.2 g/t translates to a likely cost difference of $100/oz in total production costs. These are the actual differences at the Gold Ridge mine, Guadalcanal, in 2009. This mine never achieved profitability, not because of political unrest, but because the low quality of the deposit compared to the quality of ores shaping world markets. Gold Ridge, with a 20 million cubic meter capacity tailings storage facility with a long history of many owners, frequent interruptions, and continually falling recovery rates (another emerging consequence of mining very low grade ores), under ownership of landowners with no technical competence, has hovered on the brink of complete failure by overtopping for two years. Blight and Fourie (2004), George Ireland (Sylvester 2012) and Irwin Wislesky (Moore 2016), among others, all cite technical competence, technical mistakes, and caliber of mine operators as an unexamined and significant back drop to mine failures.

1.      CONCLUSIONS

 

As we see most stunningly at Samarco’s largest failure ever in recorded history, without clear standards in law and regulation viz. best available technology and best applicable practices, and adequate competent independent life of facility oversight, efforts to attain profitability will continue to lead to choices at the mine level that can eventually lead to catastrophic loss. As we see at Mt Polley, that eventual catastrophe could emerge as any one of several causes of loss. Mt Polley could have been an overtopping failure of the same magnitude as the foundation failure. Samarco’s Fundao dam, it is important to note, was only put in service in 2009, had an Independent Tailings Review Board, and highly regarded expert advisers. In British Columbia, Imperial Metals was found not to be in violation of any law and regulation, even though its economically driven deviations from best available technology and best applicable practices culminated one as one of the 10 largest failures ever in recorded history. Similar economic forces and economically driven decision making that maximize throughput have shaped the wrong choices that have led to very serious failures throughout recorded history.

 

… a better understanding of causes of loss establishes a basis for intervention in time to prevent tailings dam failures. If we can recognize the early warning signs that could evolve to catastrophic loss, we will be able to address actions and changes to prevent that ultimate manifestation.

We can expect future losses to routinely exceed the severity of Mt. Polley. With so many very large upstream tailings dams in use and continuing to be authorized, we can also expect others to fail at the scale of Samarco, a very small impoundment compared to others standing ,in operation ( and planned).

 In this paper we are suggesting that best available technology and best applicable practices must be partnered with reforms in law and regulation, and an awareness of the role of economics.to build solutions that will save investors, communities, and natural resources from the un fundable damages of catastrophic failure at super-sized tailings storage facilities. If permits continue to be given to mines that are not economically competitive in the present and emerging global markets, even with apparent or agreed compliance with best available technology and best applicable practices, there will be economic pressure on mine operators to bend the rules.

 

 

 

Keywords: overtopping failures, embankments, tailings impoundments, severity of consequence of failure , resource policy, mineral economics

 

 

Full text of paper :

Protections 2016 2nd International Seminar on  Dam Protection Against Overtopping ISBN: 978-1-1889143-27-9

 

https://dspace.library.colostate.edu/bitstream/handle/10217/179793/CONF_2nd_Protections_2016_8-24.pdf?sequence=4&isAllowed=y

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MT POLLEY BEYOND PROXIMATE CAUSE OF FAILURE: Pre Failure Economics

Beyond “proximate cause”, the focus of most dam committee reports,  are the root economic causes of most catastrophic failures.  Imperial Metals had two principle mines, Huckleberry and Mt Polley that never achieved profitability and were developed and run on “shoe string” economics from the outset.

Writing in the cover to the 2000 Imperial Metals annual report , then CEO and Chair Murray Edwards ;”

“While both mines have been a technical success, they have yet to generate the financial returns that were expected when they were given the go ahead for construction in 1996, on the assumption that long term metal prices would be US$1/lb for copper and US$380/oz for gold.”

In 1996 the global average cu grade was .79 ( 1.26 weighted average grade) while grade at Mt Polley was .35.   The CU Equivalent for Mt Polley taking into account other metals mined and processed was only 0.5 as compared with a Cu Equivalent of 300 copper mines over roughly this same period of over 2.0(Per Aguirregabiria & Luengo 2016).  (http://isites.harvard.edu/fs/docs/icb.topic1465230.files/copper_mining_victor_27112014.pdf)

 (The Aguirregabiria & Luengo is the first research we have seen taking full account of the role of  metals  other than copper in production volumes at copper mines.  In their sample of 300 copper mines representing 85% of copper production globally, other metals accounted for abut 25% of equivalent cu production volume  and value.  Mt Polley, with both a very substandard primary ( CU) grade also had a very limited added value in other metals.  Their profile of the 300 by “realized grade” (ie Cu equivalent) puts Mt Polley at about  the 25%percentile whereas  even any mine below a 50% percentile level would be marginal and struggling to stay alive and in production)

 

The 2000 annual report acknowledged  falling grades and its spiraling economic impacts on overall performance and profitability: 

 

 “The average grade of both copper and gold mined during the year was down from 1999 levels resulting in lower metal production. In 2000, 34.2 million pounds of copper and 83,194 ounces of gold were produced, compared to 37.1 million pounds of copper and 99,585 ounces of gold in 1999.  Improved copper prices and a weaker Canadian dollar were not sufficient to offset lower metal production in 2000. Operating revenues were $94.4 million and operating loss was $9.6 million compared to operating  revenues of $98.1 million and operating loss of $2.4 million in 1999”.

 mt-polley-pre-failure-economics

The NI43101 prepared for the re-opening in 2005 after 4 years in stand-by ( 2001-2005) was  by in house geologists based on a limited drilling program which had indicated a potential higher grade zone prior to standby.  The re-enrty involved no re examination or independent expert review of economic feasibility.  Stated expectations were never achieved.

 

Meanwhwile things got worse at Huckleberry also as a result of falling/inadequate grades according the 2007 annual report:

“Mill feed at Huckleberry is now sourced exclusively from the Main Zone Extension pit. This pit will extend mine life to the year 2010 but annual production will be reduced as the copper grade there is approximately 0.35% compared to historic grades of nearly 0.5%.”

 

The chart above is for the re-opening period pre-failure, 2005-2013. Recovery rates were low and uneven averaging 0.71.  Expected grades were no better than the pre standby brief operating period 1997-2001.

 

Life of mine to failure, the “Very Serious” failure rate for Mt Polley is .011 per million tonnes of ore to the mill vs .0004 globally, that is 27 times higher than the global failure performance..

 

Operations at both Huckleberry and Sterling, Imperials in situ leaching project in the States, have ceased further impairing Imperials frail and declining economic condition.

 

In 2014 BC MOM approved Mt Milligan a very low grade deposit in the same area and having the same profile. It has a CU EQ of only 0.45, even lower than the Mt Polley re-opening period 2005-2013. It uses outmoded slurry deposition in its centerline TSF designed by Knight Piesold

 

Red Chirs, Imperials only other operating mine is operating with a water cover on tailings completely contrary to the stern and precise warning of the Mt Polley expert panel that stability concerns trump ARD generation in the sense that a method used to suppress ARD generation is not acceptable if it undermines stability of the structure containing the ARD generating materials.

Although the Mt Polley expert panel did address the specific importance of proven economic feasibility, QPO ( Quantitative Performance Objectives) and the need for checks and balances and standards/limitations on the invocation of “the Observational Method” ( responses in the field to changing or unexpected conditions) no part of this has been addressed discussed or responded to as reform of the regulatory framework in British Columbia, elsewhere in Canada or anywhere else..

 

Bowker Associates has long and repeatedly called for a financial audit of all still permitted and active ( i.e.not safely and permanently closed) mines . BC and other mining jurisdictions need to examine accept responsibility for accruing public liability risk, possible  already formed failure conditions under the control of miners who can barely manage to stay in production at all and have never attained profitable operations.

  

This report sourced all data on Mt Polley entirely from Imperial Metals annual reports and from its NI43 101.

 

Lindsay Newland Bower, CPCU,ARM, Environmental Risk Manager

 

 

 

 

 

Lindsay Newland Bowker, CPCU, ARM Environmental Risk Manager

Bowker Associates Science & Research In The Public Interest

 

15 Cove Meadow Rd.

Stonington, Maine 04681

 

207 367 5145

 

lindsaynewlandbowker@gmail.com

lindsaynewlandbowker.wordpress.com

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