By Alistair MacDonald
Some of the world's largest mining companies said more than a
dozen dams under their authority have at times failed stability
assessments by outside experts, some of them in locations where a
dam break would pose a risk to lives.
The disclosures, in detailed inventories released Friday, follow
the deadly collapse of a mine-waste dam in Brazil, owned by
Brazilian company Vale SA, earlier this year, which killed 270
people. Since then, regulators and investors have demanded more
transparency about the safety of dams designed to hold back the
tailings, or waste, from mining operations.
The Church of England and several Swedish pension funds, which
invest billions of dollars in global sectors including mining, had
encouraged big mining concerns to disclose details about their dams
by Friday. In response, Anglo American PLC, Barrick Gold Corp.,
Newmont Goldcorp Corp., BHP Group Ltd., Freeport-McMoRan Inc. and
Glencore PLC each issued documents tallying up details about their
dams, including their location, size and type of design.
Among a set of questions the companies were asked to answer was
whether each facility, at any point in its history, had ever failed
to be confirmed or certified as stable by an independent engineer,
or experienced notable concerns about its stability. Such dams are
typically inspected regularly to assess their stability.
Four of Toronto-based Barrick's dams had come under question,
the company said. For instance, a recent independent review of a
dam in Ontario showed "an inadequate factor of safety against
liquefaction," according to footnotes on Barrick's disclosure.
Liquefaction, a process whereby seemingly solid materials
suddenly behave like a liquid, occurred during the Brazil disaster.
Barrick said in its notes that it plans to add a buttress to
further stabilize the dam.
That dam has a current so-called hazard classification of high,
which means that any collapse could result in up to 10 lives being
lost and high economic lossesto the area.
This isn't a safety rating of the dam itself but a measure of
the potential damage to property and life in the event a dam
failure. Another Barrick dam whose stability was questioned had a
hazard classification of very high, meaning up to 100 lives could
be lost and very high economic losses incurred if it were to
fail.
In a letter accompanying Barrick's disclosure, Chief Executive
Mark Bristow said: "Where issues are encountered...the company will
develop and conduct the necessary programs to address knowledge
gaps and, if required, improve estimated stability."
Switzerland's Glencore also disclosed several dams that outside
engineers had questioned. Two of those dams, both in Peru, had a
hazard classification of extreme, indicating that the collapse of
either could cost more than 100 lives and cause significant damage
to local infrastructure.
Glencore said in footnotes to its disclosure that one of those
two dams may suffer from deformations under extreme earthquakes and
that a detailed assessment was under way. The other didn't meet
guidelines for extreme flooding and remedial work was in progress,
it said.
In a statement with its release, Glencore said it uses outside
experts to independently audit its dams and conducts its own
regular dam safety inspections. A spokesman didn't immediately
respond to requests for comment.
London-based Anglo American said 12 of its dams fit that
category. According to footnotes, that number was based on past
reviews or incidents, sometimes occurring when Anglo wasn't
operating the mine. The company said in its disclosure that all of
the issues had been remedied. According to the document, for
instance, "stability concerns were identified" at a diamond mine in
South Africa, run by De Beers, a unit of Anglo American. A buttress
was added to address the concern, it said, without disclosing
when.
"We have confidence in the integrity of our facilities around
the world, which are subject to the highest global safety and
stewardship standards, " a spokesman for Anglo American said in an
email.
Of Freeport's 77 active and inactive dams, 61 have either an
extreme or a very high hazard rating. The U.S.-based miner said
many of its dams are located in areas with the potential to affect
people.
"As a result, our programs take into account the significant
consequences resulting from a potential failure, and we apply
substantial financial resources and technical resources, both
internal and external, to the safe management of all those
facilities," it said.
Five of BHP's dams are classed as extreme. A BHP spokesman said
the classification is based on a hypothetical worst-case scenario,
not on a probability of a collapse. A 2016 review concluded "no
immediate concerns regarding dam integrity across the portfolio,"
he said.
Australian mining giant BHP was the only company of those whose
disclosures were reviewed by The Wall Street Journal that didn't
disclose any dams as having come under question from outside
experts. Newmont listed five of its dams as uncertain, adding all
of them were inactive.
Prompted by the investors' request, the mining companies also
disclosed how many of their dams were so-called upstream dams, a
type that has been involved in some of the worst recent accidents,
including the January dam in Brazil.
Upstream dams are considered the cheapest type to build, but are
also seen by experts as the most prone to failure. They are built
from the same mining waste they are designed to hold back. Unlike
other dam types, upstream structures mainly depend on the actual
waste, or tailings, for their stability, whereas in other types the
waste is contained behind an engineered structure.
The majority of Freeport's dams are upstream, or 66 out of 77.
Out of the 91 tailings dams managed by Anglo American, 15 are
upstream. Barrick disclosed that 28 of its dams are either upstream
or a mixture of upstream and another design. Of the 67 tailings
dams operated by BHP, 29 are upstream. Glencore disclosed 81
upstream dams out of its 216 facilities, including joint ventures
where it isn't the main operator.
Upstream dams are banned in Chile, Peru and, since January,
Brazil. Provinces in Canada and the state of Alaska discourage
their use. Some such dams are located around the world, including
in the U.S.
Companies have said such dams can be safe, but their safety
depends on widely varying conditions around the world, such as
climate and seismic activity. Wet weather and seismic activity can
increase risks to stability.
Other information in the companies' disclosures includes the
size of the dams and whether they are still active.
Following January's disaster, mining companies rushed to recheck
their dams, while industry bodies and regulators looked afresh at
how the sector manages risk from these structures. The
International Council on Mining and Metals, an industry group that
includes 26 of the world's largest metals-and-mining companies, set
up a review to produce a global standard for managing waste dams.
It is expected to include a system for independent reviews of the
structures.
The Association of State Dam Safety Officials, a trade body that
seeks to improve U.S. dam safety, is considering recommending the
addition of specific information about tailings, or mine waste,
facilities for the first time as it helps update the U.S. Federal
Emergency Management Agency's guidance on dam safety
regulation.
Write to Alistair MacDonald at alistair.macdonald@wsj.com
(END) Dow Jones Newswires
June 08, 2019 07:27 ET (11:27 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Anglo American (LSE:AAL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Anglo American (LSE:AAL)
Historical Stock Chart
From Sep 2023 to Sep 2024