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 firstname.lastname@example.org
2Center for Science in Public Participation 224 N. Church Ave. Bozeman, Montana 59715 USA Email: email@example.com
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.
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).
- 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.
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