Brazil Dam Collapse Prompts Potential Rule Shakeup for Miners

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A view of a rail bridge taken down by a mudslide on Jan. 27, 2019, after the collapse of a mine-waste dam operated by Vale in Brumadinho, Brazil. PHOTO: MAURO PIMENTEL/AGENCE FRANCE-PRESSE/GETTY IMAGES

Posted November 17, 2019

By Alistair MacDonald

A group representing the world’s largest miners published draft proposals for strict new standards to govern how companies build and operate the sort of mine-waste dam that collapsed in Brazil early this year, killing 270 people.

If adopted by companies and governments, the standards recommended by the International Council of Mining & Metals would require miners to design and monitor their dams to new, tougher benchmarks. They would require greater public disclosure about the dams and specifically prohibit any conflicts of interests between companies and independent safety auditors they hire to inspect such dams, among other measures.

The proposals, though, face many obstacles before becoming enforceable. Mining regulation around the world is a hodgepodge of national and local laws. In many places, such standards are left to companies and trade bodies, whose recommended industry “best practices” are hard to enforce and not backed by law. The new proposals could be costly, so miners may not take them up unless compelled to do so. It’s also unclear, at this stage, who will enforce the standards companies say they are following.

The new rules come in the wake of the January failure of a mine-waste dam operated by Brazilian mining giant Vale SA in Brumadinho, Brazil. That accident, which followed several other deadly dam collapses, has upended the global mining industry, sending miners scrambling to check their dams, triggering protests against new structures and making fund managers more cautious about a sector already subject to intense scrutiny by regulators, investors and environmental activists.

“Catastrophic tailings facility failures devastate the environment and destroy lives and livelihoods,” said Bruno Oberle, a Swiss academic hired by the ICMM and others to chair a panel of experts in the field that put together this review. “There is an urgency associated with this task as the first anniversary of the Brumadinho tragedy approaches,” he said in the foreword to the proposals.

Among Mr. Oberle’s group’s proposals is a drive to stamp out conflicts of interests at miners by having independent reviewers for all aspects of the design and operation of tailings dams. The Wall Street Journal first reported close ties between Vale and its inspector, Germany-based TÜV SÜD.

A Journal investigation found Vale and its inspectors were aware of dangerous conditions at the mine-waste dam months before it collapsed but that inspectors, worried about losing Vale contracts, certified the dam as safe.

Miners should “engage an Independent Tailings Review Board or an independent senior technical reviewer with no conflicts of interest,” the report recommends.

The review promotes the latest practices in the planning, design, construction, operation, maintenance, monitoring and closure of such dams, also called tailings dams, which contain the waste of the mining process.

If adopted, the proposals will come at a cost to miners, including by increasing the amount of public consultation required when proposing new dams. That process can already take years.

The review also makes demands of senior executives, who it says should be held responsible for any accidents. Brazilian police have announced charges against seven lower-level individuals from Vale and six employees from TÜV SÜD for allegedly covering up structural dangers at the dam. They are now also investigating the role of more senior executives in a criminal probe. Vale has previously said that the company’s top executives never had any knowledge or received any indication about risks to the dam.

Under the new proposals, a company’s board or senior management would need to approve proposals for new dams with high hazard ratings and help craft steps to minimize the consequences of any collapse.

Miners noted the release of the document on Friday, saying they would engage with the consultation, which lasts until Dec. 31. A spokesman for Glencore PLC said the London-listed company was committed to “developing a fit for purpose and robust industry wide approach for the safer management of tailings storage facilities.”

The principles are an excellent start given they incorporate guidance offered by experts in this field, said Lindsay Newland Bowker, an environmental risk manager based in Maine who studies accidents at mining dams.

Source: wsj.com