Mining Financial Risks Post-“Super Cycle” Point to Escalated & Unexamined Already Accrued Public Liabilities & Environmental Security Losses

Although this Ernst & Young report on “post super cycle” mining business risks speaks from the miners point of view, not from the environmental risk/public liability point of view, the economic realities presented here are what Bowker Chambers (2015) was pointing at (and named) as a major factor in the formation and manifestation of public liability risks.   This report details the dramatic elevation of global business risk in the mining & metals sector.  The steps the global mining cartel  have taken, and are continuing to take, to navigate what Ernst & Young lays out here  leave local communities with existing, operating, financially at risk zombie mines and zombie companies with ever higher levels of public liability risk and ever diminishing possibilities of intervention in time to prevent the irrevocable manifestation of that risk in environmental security breakdowns of unimaginable economic and biologic consequence.
 herculao dam failure_
The knowingly myopic focus of the ICMM, MAC and the other huge mining lobbies on “the mechanics of failure” in the wake of Mt Polley and the Samarco TSF failures is meant to divert public attention and any  demands for fundamental legal reform away from interference with the massive consolidation and reallocation of viable global mining assets under the control of a very few very large miners.
Those less desireable financially marginal assets spun off by the global cartel or, that a Zijin or some other notorious violator of human rights and environmental security will take on, will be beyond any control or accountability  to local voices and local rights and beyond the  reach of existing legal frameworks for mining.  Witness the Chinese owned Yukon mine, the Wolverine.  Those deposits  that not even the most avaricious foreigners will view as actual “assets”in this new epoch of metallic mining, will become, really already are, “stranded assets” both in the usual sense of that  in economic terms and  in a broader sense from the point of view  of local community, local budgets and GDP. (In other words what is being thrown as  life lines to these already fatally impaired mineralized deposits and/or what it will take to assure their environmental security, is a net financial loss to the local community and local natural resources.  There’s always a  community economic, social and environmental impact side to any economically stranded mine asset.( witness coal which is a far more advanced cycle  of loss of place in global economy)
 liquid gold
The global mining agenda being executed by the  mining cartel is the consolidation and therefore global market control of potentially still viable metallic  assets with a few large companies.  Non performing assets and assets that are fully depleted in this new era of mining will simly be written off and abandoned  They are already “stranded assets” in the fuller meaning of that economics term that Bowker Associates uses here.   They are already fully accrued but unexamined public liabilities.
The message to public interest and environmental advocacies is clear.  It isn’t enough to speak louder to the statistically irrefutable trend to increasing consequence and severity of loss from mines that have been mis planned, mis developed  and which cannot be  operated profitably even with the huge direct and indirect subsidies from the public sector ( approval of ever larger deferral of royalties and taxes, the push for lacustrine riverine and marine dispoal of tailings & toxic mine wastes etc). Witness among a long list in B.C.,  Taseko , Tulsequah and the Gibraltar Mine.
The message on behalf of environmental security is to pay much more attention to the  fundamentals  of economic viability and to global markets and trends.  To recognize that the present economic epoch of metallic mining puts the economics of mining on a collision course with environmental security at a greatly higher level of public consequence and real public  “off the top of GDP” cost.
Some points of advocacy that call for an essential fundamental  course correction in mining public policy  might include:
(1) a complete and immediate  financial risk assessment of all permitted assets and some sort of legislation to prevent  the abandonment or undesireable transfer of the assets  (ie keeping existing permit holders and their remaining assets accountable to the public consequence they are trying to escape  ( witness St. Barbara’s improved financial condition after  transfer of a trouble asset ( Gold Ridge Mine) to hapless local landowners.  Contray to local landowner expectations there has been no competition to take on this mine and its enormous liabilities). In plain English:..fine sell, but you are still  legally liable for the public liabilities accrued under your tenure unless the entity you want to sell to  has the assets and technical capacity to assume that liability and actually does.including taking immediate responsibility for the corrections necessary to make the asset immediately secure environmentally, and of course actually performing on this commitment ( which has not happened at Tulsequah).
(2) an immediate national and provincial re assessment of mineralized assets against these global economics and a responsible expertly informed  repositioning of the place of metallic mining viz competitiveness in global markets and effect on GDP
(3) a  complete reform of the legal framework for mining to insure that no mineralized asset is given a permit or allowed to submit an application without a peer reviewed proof  that:
(a) the deposit actually is financially viable life of extraction inclusive of and conditioned  on full incorporation of essential environmental security
(b) there is a field proven ( not theoretical or bench proven) technology /BAP available to attain adequate levels of environmental security (see unproven seepage control proposed at Tasekeo’s New Prosperity or the “innovations” to TSF’s of upstream construction that are outside best knowledge/best practice especially Samarco)
(c) the miner has the technical and financial capacity to undertake the proposed development within acceptable boundaries of financial risk.
If these are some of the mining legal framework  reforms which will assure higher levels of accountability to environmental security and public risk, the legislative drawing board must have input from all voices and sectors of expertise and advocacy.
contact: Lindsay Newland Bowker, CPCU. ARM Environmental Risk Manager, Founder & Director Bowker Associates Science & Research In The Public Interest

About lindsaynewlandbowker

Bowker Associates, Science & Research In The Public Interest, is an independent non profit providing self initiated pro bono analysis on key issues with a potential for massive adverse environmental impact . Bowker Associates has been an internationally recognized and cited voice in analysis of the Samarco failure, its consequence, and the possibilties for recovery. In 2017 we partnered with Daveid M. Chambers, a world leader in responsible mining, in our third joint work on the economics of tailings failures. Bowker, L.N.; Chambers, D.M. In the Dark Shadow of the Supercycle Tailings Failure Risk & Public Liability Reach All Time Highs. Environments 2017, 4, 75. A peer reviewed journal published investigation of the cowboy economics of the supercycle and the resulting escalation on the number and magnitude of catastrophic failures. In 2016 we parnered with Dave Chambers in our 2nd joint work together looking at root causes of failures at a conference . Bowker, L.N.; Chambers, D.M. Root Causes of Tailings Management Failures: The Severity of Consequence of Failures Attributed to Overtopping 1915–2015. In Proceedings of the Protections 2016, Fort Collins, CO, USA, 14 June 2016. [Google Scholar] In 2015 Bowker Associates collaborated with geophysicist David M. Chambers to recompile global authoritative accounts of significant TSF failures in recorded history and to analyze these data in the context of global mining economics 1910-2010 ( Risk, Economics and Public Liability of TSF Failures, Bowker/Chambers July 2015) The third annual update of this globally referenced and used compilation was just released at Researchgate. ( In 2014 Bowker Associates commissioned globally respected geophysicist and hydrogeologist Dr. David Chambers to undertake two technical works: (1) development of technical go no go criteria for vetting mine applications tp:// and (2) a case study of Maine's Bald Mountain, an un mined low grade high risk VMS deposit demonstrating the efficacy and accuracy of two risk assessment tools in vetting mine proposals In Maine, Bowker Associates has deeply engaged and been a public voice in the Searsport DCP LPG Tank, The Cianbro proposal for a Private East West Toll Road, JD Irvings rolling pipeline of Bakken crude to its plant in St. John and review of Phase II plans at The Callahan Superfund site in Brooksville, Maine, and Maine's revisitation of mining in statute and regulation... Our only “client”: is always “the pubic interest”. Our model is to focus on only one or two issues at a time so that we have a substantive command of the relevant field as our foundation for ongoing engagement. Our core work is in envirommental risk management, science and technology as well as bringing any available “best practices” models to the fore. The legal and regulatory history/best models are also a major thrust of our work in building and evaluating public policy. Director/Principal Lindsay Newland Bowker, CPCU, ARM is a recognized expert in Environmental Risk Management., Heavy Construction Risk Management and Marine and Transit Risks and has more than 3 decades of engagement in buiding public policy. Appointed by Governor Mario Cuomo to New York State Banking Board (served 1986-1996); President New York Chapter Chartered Property and Casualty Insurers; Environmental Committee, Risk and Insurance Management Society; Director, Convenor/Co-Chair Bermuda Market Briefing "From Captive to Cats" Hamilton Bermuda. Published Articles of Significance The Risk Economics and Public Liability of Tailings Facility Failures, co-authored with David M. Chambers, July 2015 Beyond. Polarization: Superfund Reform in Perspective, Risk & Insurance Managing Risk For Loss Prevention & Cost Control (Jan. 24, 1997). Lead Hazards and Abatement Technologies in Construction: A Risk Management Approach CPCU Journal 1997 Employee Leasing: Liability in Limbo Risk Management June 1 1997 Environmental Audit Privilege and the Public interest Risk & Insurance Managing Risk For Loss Prevention & Cost Control, April 1997 Asbestos:Holes In Abatement Policies Need To Be Plugged, Lloyd’s Environmental Risk International, May 1993 Editor Published Letters Evironmental Risk Management Beware of Facile Policies Like Fetal Protection Business Insurance 1995(?) High Court Review May Increase Sale of Bank Annuities Business Insurances August 8, 1995 Professional Profiles Protecting the Big Apple’s Core Managing Risk For Loss Prevention & Control December 1996 Major Career Highlights First rigorous analysis showing Relationship Between declining ore grades and TSF Failures of increasing consequence ( July 2015) FIrst Documentation that Gentrification Has Same Impacts as Unassisted Displacement from Urban Renewal Sites Direted Court Ordered EIS of FHA Mortgage Scandal Created Nation's First Homeownership Program for Low Income People (SHIP) Created Earliest Geographic Information Systems Using Defense Technology Developed By IBM Designed and Conducted Parallel Census Count to Show Systematic undercount in minority neighborhoods Documented Bias in ISO Territory Rating Plans for Private Passenger Auto Insurance Using ISO's own Rating Techniques Demonstrated Inherent Bias in Mortgage Policies of Banks With Inner City Branches Demonstrated that NY Telephones Plan for Area Code Split To accommodate anticipated cell phone demand was not efficient and would exhaust in 5 years ( which it did) Undertook First Systematic Evaluation of Child Protective Services Caseload Using Multi Variate Analyic Techniques Developed Child Protective Caseload Management and Tracking System (CANTS) and directed implementation in 4 client states including Illinois, Florida and New York Created and Ran Office of Risk Management for NYC DEP the Nations largest Water & Sewer Authority . Designed, Created and Administered Nation's First Owner Controlled Insurance Program (OCIP)for High Risk Tunneling Education Masters NYU Graduate School of Public Administration BSC New School For Social Research Maine Public Schools Deering High School
This entry was posted in Bowker Associates Science & Research In The Public Interest, Catatrophic Tailings Dam Failures, Causes Of Catastrophic Tailings Dam Failures, Environmental Risk Management, financial risk and public liability, Fundao Talings Dam, Germano Tailings Dam Failure, Gibraltar Mine, Global Capital Squeeze In Mining, global cash flow crunch, global copper market outlook, Gold Ridge Mine, Height Limits of Earthen Dams, Highly Valued Natural Resources, lacustrine mine waste disposal, Lindsay Newland Bowker, Measuring Magnitude of Consequence TSF Failures, Metallic Mining Risk Management, mine Company Valutaion, Mine Feasibility, Mine Risk Management, Mining Economics, mining environmental risk management, Mining Financial Feasibility, mining post-supercycle, Mining Regulation, Mining Risk Management, New Prosperity Mine, plutonomy, politics of mining, polluter pays, Prosperity Mine, Public Liability & Financial Risk, Rate of Raise for Upstream Tailings Dams, Responsible Mining, Risk & Public Liability of Tailings Dams, Risk Avoidance & Loss Prevention Metallic Mining, Risk Economics and Public Liability of Tailings Dam Failures, Samarco falha de barragem de rejeitos, Samarco investigação de crimes ambientais, Samarco Mineracao S.A., Science for Sale, Social Premium of Metallic Mining, Tailings Dam Failures, Tailings Dam Risk Management, Tailings Storage Facility Failures, Taseko, TSF Failure Environmental Costs, TSF Failures Consequence, TSF Risk Profile, TSF Risk Profile Globally, Uncategorized, Upstream Tailings Dam Safety. Bookmark the permalink.

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