WHY DO MINE TAILINGS FACILITIES FAIL AND WHAT CAN BE DONE TO REDUCE THIS RISK?

A RISK BOW-TIE IS USED TO EXPLORE THE MANAGEMENT OF THIS RISK.


The failure of a tailing’s dam has the potential to be to the mining industry what Deepwater Horizon was to the energy sector.  The risk of mine waste sludge being inadvertently discharged into often populated and environmentally sensitive valleys is routinely highlighted in company risk reports [1].  Billions of dollars are at stake as they are required to pay for what environmental clean up is possible; the rebuilding of destroyed communities; payment of government fines and legal proceedings; weathering of shareprice slumps; not to mention the reputation remediation required of both the companies responsible and mining sector as a whole.  


SAMARCO:  TAILINGS FACILITY FAILURE 2015
The failure of two of the Germano mine tailing’s dams (Barradens de Fundao and Barragem de Santarem) on the 5th November in Brazil resulted in a catastrophic release of iron ore processing residue into the valley below.  Video footage of cars perched on top of buildings painted a deep red by the tailings and iron rich soil from resulting landslides has peppered our media as the sludge oozes downhill.  Multiple people are confirmed to have died, and many individuals are still missing.

The Germano mine is run by Samarco, a joint venture between two of the world’s largest mining companies:  Vale and BHP Billiton.  In 2014, Samarco produced 25 million tonnes of iron-ore and delivered an EBITDA of R$3,762m [2].  There is enough iron ore in the ground to sustain this mine for a further 39 years [1]

As yet, the cause of the failure is unclear.  However, Ricardo Vescovi (CEO Samarco), together with the CEO’s of both Vale and BHP Billiton have instigated their appropriate crisis responses and a full investigation will no doubt be carried out.  

WHAT CAUSES A TAILINGS FACILITY TO FAIL?
Tailings facilities can fail due to a myriad of factors, from inappropriate site selection for the facility in the first place, through to a lack of thorough maintenance of the facility.  The risk bowtie below outlines some of these causes.

 
HOW CAN A TAILINGS FACILITY BE PREVENTED FROM FAILING?
Reducing the need for wet tailings through alternative processing methods (e.g. dry processing) is the best way to reduce the potential impact of a failure.  Mining technology is not currently advanced enough to ensure this is an option in all cases however.  Reducing the volume of tailings is a control implemented by many companies as tailings facilities cost money.  This can be done through the use of thickeners or improving processing and mining methodologies upstream.

Proper maintenance and monitoring of a facility may not stop a failure, but it will provide early warning of a heightened risk of failure.

 
WHAT COULD BE DONE TO REDUCE THE FULL CONSEQUENCE OF A TAILINGS FACILITY FAILURE?
Relocating populations away from the path of a potential breach of a tailings facility is often costly, time consuming and damaging to a company’s reputation.  However, it significantly reduces the impact on a local community should a tailings facility fail. 

Robust emergency and crisis plans which are regularly tested are essential to manage the disaster should it occur.  These should be followed up with environmental remediation as soon as possible.

 
IN SUMMARY
Mining as an industry is struggling.  Commodity prices have been falling for months.  However, the world still needs iron ore, copper, coal,… (just maybe not so much of it right now as initially anticipated).  So we need to mine in a smarter way that is lower cost and poses less risk to the environment around us.  We may not be able to eradicate our need for tailings facilities, however we can certainly manage them better and ensure that their likelihood of failure is significantly reduced.


This is only one example of how a risk bow-tie can be used to explain a complex situation and prompt data-based discussion and decision making.  Please feel free to contact us direct if you would like to discuss other examples or our experience using risk bow-ties as a method of reporting and problem solving at all levels in organisations.



References:

[1]  http://www.bhpbilliton.com/~/media/bhp/documents/investors/annual-reports/bhpbillitonannualreport2014.pdf  

[2]  http://www1.samarco.com/uploads/mwr63fx.pdf