Tailings dams: report highlights upstream risks
Tailings facility failures represent a significant risk to the environment and communities globally, but until now little data was available on the global distribution of risks and characteristics of facilities to ensure proper governance.
The most widespread type of dam used to store mine waste is nearly twice as unstable as the average tailings facility, a global study has revealed. It highlights the risk of so-called ‘upstream’ construction techniques which some countries have banned.
Concern over tailings dams intensified after the deadly collapse of Vale’s Brumadinho upstream facility in January 2019.
Some 10% of all the facilities surveyed had reported a stability issue, the authors found, but that figure jumped to 18.3% for active upstream facilities, reports Reuters.
The volume of mine waste worldwide is projected to grow 26% over the next five years according to company disclosures analysed in the study published in Scientific Reports, one of Nature's open-access journal s.
The disclosures requested by the Church of England and Swedish Council on Ethics cover 1,743 tailings facilities, representing an average 36% of current global commodity production.
A new global tailings standard launched last year stopped short of banning upstream dams.
But investors, banks, insurers and local communities are unlikely to support their construction given elevated risks, said Adam Matthews of the Church of England Pensions Board and one of the study’s authors.
“I think you’ll find enormous scrutiny,” he said.
Around one-fifth of dams built in the last decade have been upstream, the study found.
Cheaper to build, they are more dangerous because their walls are constructed over a base of muddy mining waste rather than on solid ground. Chile, Peru and Brazil have banned the structures.
But globally, the use of alternative technologies such as ‘dry stack’, or de-watering, to reduce risks has stayed static between 3% and 6% since 1970, the study found.
“For a long time the mining industry has been able to treat tailings as an externality and the incentives weren’t there to take up innovations to manage tailings differently,” said Daniel Franks, lead author and professor at the University of Queensland.
“Now that it’s become a strong concern for investors, governments, and society, there’s a real opportunity to embrace reform.”
The study called for further investor engagement with non-responsive companies, including privately-owned or state-owned miners.
BHP deliberates ditching fossil fuels for greener mining
The world’s biggest miner, Australian-based BHP, is supposedly considering withdrawing from a multi-billion dollar contract, which would see the company generate more than US$2bn due to mounting pressure over aligning its business with ongoing climate concerns and ESG-compliance measures.
Exiting the agreement would mean BHP escalate its distancing from oil and gas and subsequently cut down on the amount of fossil fuels used by the company when mining.
It’s estimated that the petroleum business being debated upon could actually be worth around US$15bn but is still under talks to be put up for sale.
Global Mining Giant Considers Greener Future
BHP has made itself clear that it wants to avoid becoming unable to sell its assets. As competition within the market increases following higher numbers of oil giants wrestling with investors to deal with climate pressure, so too are the number of mining rivals looking to make environmental changes for the future.
However, BHP currently has the upper hand as a stalwart mining company that established itself back in the 1960s, allowing it the time to grow and dominate over other fast-appearing mining competition.
Mike Henry, BHP Chief Executive, has an optimistic outlook for the future of oil and gas despite worries over rising demand to align his business with the Paris Climate Agreement. Henry argues that prices remain promising due to a lack of industry-wide investment.
BHP’s petroleum business won’t be easy to say goodbye to. Forecasted to generate around 6% of profits during the ongoing financial year (US$2bn), and around US$1.6bn revenue produced by BHP petroleum in the six months leading to December 2020, BHP is due to take a hit no matter what agreement they choose.
On the other hand, distancing itself from thermal coal and petroleum would arguably aid the company’s case to possible - and valuable - investors who may be required to fund BHP’s increased output to places such as Australia and Mexico in the near future.
BHP considers cutting billion-dollar contract to aid climate
An exit away from petroleum has the potential to be “a powerful corporate catalyst,” says Dominic Kane, Analyst at JP Morgan.
“We believe an exit would likely ring-fence BHP’s exceptional cash flows for non-fossil fuel organic growth, mergers and acquisitions and generous shareholder distributions since BHP could avoid a major new capital investment phase this decade in petroleum.”
BHP is also set to sanction a giant US$5.7bn Canadian potash mine in August of this year, already seeing potash as a long-term substitute for gas and oil going into the future. The company has also previously announced plans to abandon its 80% share in its joint endeavour with Mitsui, owner of two lower-quality mines in Queensland, Australia.
BHP is scheduled to report its annual results on August 17, after which it may become clearer on whether the company will choose to focus its shift to a low-carbon economy or whether it will stay with its current contract into the coming year.