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.
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)
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 firstname.lastname@example.org