Tailings Storage Facilities. It’s not just what you do, it’s how you do it.

A recently compiled data set¹ states that the material stored in active storage facilities operated by the top mining companies would be able to cover Manhattan island to a depth of 750m, that’s 200m more than the tallest building.

TSFs are required to store mining waste after ores are extracted. They are usually embankment dams made from locally won materials and thereafter the tailings are used in construction. Mine tailings are pumped or deposited into the sites as a slurry and are composed of fine silts and sands which can be toxic or radioactive.

The necessity to move to a low carbon future will fuel our hunger for metals and minerals. The World Bank² acknowledge that the need for electrification of sectors and clean energy generation is more mineral intense than would be the case in a fossil fuel economy. This requirement accounts for large increases in the rate of recycling of metals and minerals. More marginal ores are being exploited, which generates more tailings in relation to the amount of ore won. Compounded with increases in demand, it is anticipated that the volume of tailings will increase by 26% over the next 5 years².

Failures of TSF can be catastrophic, leading to serious loss of life and extensive pollution, killing rivers and blighting landscapes to a point where remediation is prohibitively costly. Together with regulatory penalties and litigation, this has adverse effects on public perceptions of mining and investor confidence. In addition to 270 deaths, the Brumadhinho failure caused the share price of Vale to fall by 24%. The company had to remediate the land up to 120km downstream of the site and pay fines and community compensation in excess of US$7Bn.

The life of a TSF starts in the operational phase where, after initial design and enabling works, the retaining embankment is progressively raised to store increasing volumes of waste. In diminishing order of cost, a dam can be raised either from the downstream side, along the centre line, or by layering material on the upstream side on top of the tailings. It follows that the cheaper upstream construction method has a higher risk of failure and is outlawed in several South American countries.

At the end of operational phase, the asset should be made safe for the remainder of its life. According to the International Commission on Large Dams (ICOLD), the post closure phase should be considered to last in perpetuity, during which the asset should function as an inert landscape feature.

Records of the number and type of TSF are known to be incomplete, as are statistics on the causes of failure. Attempts have been made over the years to catalogue active and post operational sites by several organisations like UNEP and ICOLD. After catastrophic failures additional pressure has been brought to bear from investors, such as the Church of England Pensions Board and the Council of Ethics of the Swedish National Pension Fund. These initiatives have contributed to the understanding of the number and location of TSF, but because disclosures don’t include all operators and or non-operational assets, the picture is still hazy. Furthermore, records are inconsistent or incomplete in terms of describing the mode of construction or changes in asset condition.

In addition to Brumadhinho, there have been several other notable failures in the last decade. As a result, investors have encouraged operators to update standards and working practices. The outcome of this process is the 2020 Global Tailings Review. This was co-convened by the trade industry association the International Council on Mining and Metals (ICMM), the UN Environment Programme, and Principles for Responsible Investment. It has resulted in the publication of the Global Industry Standard on Tailings Management⁴ (GISTM). A recent publication in Nature¹ of the data compiled during the production of the GISTM notes that 10% of all tailings facilities have reported a stability issue.

A recent paper³ analyses the statistics of TSF failure (Figure 1). Among the paradigms of a high risk TSF is of an operational facility using upstream construction. Given the dynamic nature of the operational phase, it is unsurprising that 90% of failures occur during this period. The causes of failure can be split into several categories but broadly the top three are driven by water-related issues, structural inadequacies or seismicity. As a side note the proportion of ‘unknown’ causes is a telling reflection of the historical quality of record keeping. Whatever the cause of failure, commentators universally identify that poorly developed ways of working with inadequate engagement and supervision at a senior level amplify risks and allow the indicators of failure to go unaddressed.

ICOLD Bulletin 139 “Improving Tailings Dam Safety” (ICOLD, 2011) is currently being reviewed and is likely to strengthen recommendations around accountability, responsibility and competency. It should also be noted that the standards the GISTM suggests are often exceeded by standards set within national jurisdictions. These local standards are set according to each society’s tolerance of damage or loss of life. Standards in GISTM are more tolerant of risk and puzzlingly refer to lower standards during construction when failure is most likely.

We are already experiencing the impacts of climate change. The Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6)⁵ states that there is high confidence that recent heavy rainfall events that lead to catastrophic flooding have been made more likely by climate change. Though there is uncertainty, extreme rainfall events which might cause a TSF to overtop are becoming more likely. In the UK, there have been 20 instances since the year 2000 where the design precipitation for reservoirs has been exceeded. This puts a designer in an uncomfortable position where there is significant design uncertainty for an asset that has a long lifespan.

The WTW Research Network is providing advice to clients through our academic linkages and in-house expertise. We are supporting work to improve understanding of how the hydrological cycle may influence day-to-day operations and helping to set design parameters for post-closure plans.

As an underlying theme to technical drivers, the academic and technical literature agrees that risks are reduced where three steps are put in place:

1. Improved monitoring helps to identify crises soon enough to take remedial action. The offerings of in-situ and remote monitoring systems that can detect changes in position and moisture content remotely using Synthetic Aperture Radar and visual wavebands is maturing.
2. A well developed and exercised emergency plan might avert failure and / or mitigate impacts.
3. Neither though are of much use without strong organisational capabilities and corporate accountability to strengthen assurance.

Underwriters, investors and operators would do well to ask a few more searching questions as to how portfolios of these assets are designed and managed. While the GISTM was an important step toward international tailings dam regulation, some questions remain unanswered.

• Why are standards lower during the riskier construction/operational phase?
• Why is it that the GISTM standards are lower than those used for reservoirs in general. This is especially pertinent as the failure rate of TSFs is already about 100 times higher than for water supply reservoirs and, because of pollution risks, relative harm is magnified.
• GISTM standards are often lower than those in national jurisdictions. This could place a corporation in a tight spot if a liability arose in one country and was brought to trial in the jurisdiction where the company was listed.

These questions come at a time when governments and regulators are looking to ensure that ESG labelling has real meaning.

References

¹ Tailings facility disclosures reveal stability risks, Daniel M Franks, Scientific Reports, Nature Portfolio 2021. https://doi.org/10.1038/s41598-021-84897-0

² Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition. 2020 International Bank for Reconstruction and Development / The World Bank

³ A new look at the statistics of tailings dam failures; Luca Piciullo; Engineering Geology 303. https://doi.org/10.1016/j.enggeo.2022.106657

⁴ Global Industry Standard on Tailings Management 2020. https://globaltailingsreview.org/global-industry-standard/

⁵ IPCC, 2021: Summary for Policymakers. In: Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [Masson-Delmotte, V., P. Zhai, A. Pirani, S.L. Connors, C. Péan, S. Berger, N. Caud, Y. Chen, L. Goldfarb, M.I. Gomis, M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T.K. Maycock, T. Waterfield, O. Yelekçi, R. Yu, and B. Zhou (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, pp. 3−32, doi:10.1017/9781009157896.001

https://medium.com/illumination/new-international-esg-regulatory-proposals-in-a-nutshell-744f212dc34d

https://www.gov.uk/government/speeches/finance-resilience-net-zero-and-nature

https://www.churchofengland.org/about/leadership-and-governance/church-england-pensions-board/pensions-board-investments/investor

https://www.churchofengland.org/news-and-media/investors-commit-further-action-mining-2nd-anniversary-brumadinho-tailings-dam

https://www.bhp.com/-/media/documents/environment/2019/190607_coe.pdf