From ‘pushback’ to pushing ahead

In 2017, GRID-Arendal, an environmental centre based in Norway and a partner of the United Nations Environment Programme (UNEP), published Mine Tailings Storage: Safety is No Accident. The report called for the development of a global standard covering the construction and operation of tailings dams, a global insurance scheme, and more oversight and transparency around tailings.

While it was written in response to recent tailings failures, including Mount Polley in British Columbia and Samarco in Brazil (which killed 19 people), the mining sector was resistant at the time to many of the recommendations, says Elaine Baker, one of the authors of the report and director of the GRID-Arendal office at the University of Sydney.

“There was quite a bit of pushback about that report from the mining industry,” Baker says, noting that in addition to cost concerns, some of the recommendations were “fairly radical.”

It’s been a different story since the Brumadinho failure on Jan. 25, 2019, and the shocking loss of life that resulted from it. The disaster at Vale’s Corrego do Feijao iron ore operation in Brazil’s Minas Gerais state killed at least 259 people (with 11 still missing), jolting the industry into action. While the previous tailings failures precipated smaller-scale changes, Brumadinho has proven to be a catalyst for deep, sweeping changes in tailings management.

As we approach the two-year anniversary of the Brumadinho disaster, great progress has been made – most notably the launch of the Global Tailings Portal last January and the release of the Global Industry Standard on Tailings Management in August.

Progress since Brumadinho

While the mining sector was certainly shocked by the scale of the Brumadinho disaster, intense pressure from investors – headed by the Church of England Pensions Board and the Swedish National Pension Funds – has been key to the reforms that have been enacted since then.

Only days after the incident, they joined with several other institutional investors with combined assets of US$1.3 trillion to call for a global safety standard and an independent audit system for tailings facilities.

“Investors were really shaken by Brumadinho in the sense that it really just challenged us fundamentally about an issue that, quite frankly, we had a blind spot,” says Adam Matthews, director of ethics and engagement for the Church of England Pensions Board. “The seriousness of the response reflected that realization.”

In response to their call for action on tailings, the International Council on Mining and Metals (ICMM), comprised of 27 of the largest leading metals and mining companies in the world, commited to creating an international standard in February. A month later, the Global Tailings Review was convened by UNEP, ICMM, and the Principles for Responsible Investment (PRI) (of which the Church of England and Swedish Pension Funds are a part).

Global Standard

As a result of that work – which took 18 months and included both multi-stakeholder roundtables and expert panels – the Global Tailings Review released the Global Industry Standard on Tailings Management in August 2020.

The 40-page document contains guidelines covering all phases of tailings facilities, from site selection through closure, that are organized around six topic areas, 15 principles and 77 auditable requirements. The guidelines add new requirements for independent oversight of tailings facilities design and management and outline expectations for more public disclosure around tailings facilities, including information about the potential consequences of a failure.

The Standard notes that mine operators must have “zero tolerance for human fatalities and strive for zero harm to people and the environment from the earliest phases of project conception.” It also notes that to be compliant with the standard, operators must use “specified measures to prevent the catastrophic failure of tailings facilities and to implement best practices in planning, design, construction, operation, maintenance, monitoring, closure and post closure activities.”

Matthews believes the Standard has codified good practice in many aspects of tailings, will give investors confidence in companies when the standard has been applied, and sees the Standard as opportunity for the entire sector to take a “very significant jump” up.

“I’m conscious that some companies are (already) operating to extremely high practices, but we wanted to establish something that was universally applied, wherever your jurisdiction of operation, in addition to following any local requirements,” he says.

GRID-Arendal’s Baker says that while the Standard has some compromises, it has increased company disclosure and transparency around tailings facilities.

“The strength of the Standard, for companies that are compliant with it, is it makes the whole operation much more transparent,” she said. “And it’s provided a kind of mechanism for monitoring and auditing tailings dams – and that’s really the next step is to implement that.”

In addition, Baker notes that the Standard contains strong requirements for community engagement.

While there has been some criticism that the standard is voluntary, ICMM members have committed to becoming compliant with the Standard within three to five years. And Matthews says implementation is expected to spread well beyond the largest companies in the industry.

“Now that we have a standard, you’re going to see us investors very clearly expecting companies to support it and confirm their implementation of it,” Matthews says.

In fact, in December, UNEP and the PRI sent a letter to over 350 mining companies asking them to do just that and to set out a timeline for intended compliance.

Matthews believes that even though the Standard is voluntary, it will still achieve results.

“Where companies are not responsive, we’ll use engagement,” he says. “We’re very effective at it and there’s a very large number of investors making this ask. My suspicion is that the vast majority of companies will be responsive.”

Global Tailings Portal

The Global Tailings Portal, launched in January 2020 by GRID-Arendal, is closely related to the Global Tailings Standard.

The portal is a central place that houses information submitted to the Investor Mining and Tailings Safety Initiative (a group of institutional investors again led by the Church of England and Swedish Pension Funds), as part of a push for disclosure after Brumadinho. The portal currently has information supplied by 105 mining companies on 1,847 tailings facilities, including raise type, storage volume, construction year, maximum height, elevation, date of last independent review, and more.

Until now, this information wasn’t disclosed by mining companies – let alone being centralized in one place. It was even surprisingly onerous for companies to gather, Baker says, a result of a siloed way of operating.

While the portal, which is free to access at the GRID-Arendal website (tailing.grida.no) is a leap forward in and of itself, the plan is to ultimately align it with the Standard so that it becomes a mechanism for implementation of the Standard, Baker adds. A planned updated version of the portal will also allow companies to input their own data.

One of the principles of the Standard is to develop plans and design criteria to minimize risk for all phases of a facility’s life cycle – including post-closure. Part of this involves determining the consequences of failure of a facility by assessing the size of the dam and the size of the downstream population. This information is also included in the portal.

However, users should keep in mind that “consequence of failure” ratings, which vary from “low” to “extreme,” say nothing about the actual likelihood of failure.

It’s also worth noting that with an estimated 18,000 tailings facilities around the world (of which aroud 3,500 are active), the data is far from complete, including very little data for facilities in China and Russia.

Still to come

The work on the Global Tailings Standard is very much still in progress. Still to come is a conformance protocol the ICMM is developing to outline how performance will be measured against the Standard.

A new independent international body is also being established to oversee implementation of the code. One of the key recommendations of the Global Tailings Review and its independent chair, Bruno Oberle, the body is expected to be modelled on the Cyanide Code, and will be able to verify the Standard is being applied as intended. In December, UNEP, the PRI, and the Church of England and Swedish National Pension Funds announced a partnership to create this independent institute.

“The Standard in and of itself is hugely important, but it needs to have that independent entity that can provide oversight,” Matthews said. “Equally, with any standard over time, it needs to evolve, and we want an entity that can own it, and drive that process.”

Another important role for the institute will be to facilitate the sharing of best practices within the industry, and to help ensure that the Standard goes beyond ICMM membership, Matthews added.

Organizations such as the Mining Association of Canada (MAC) will also be looking to figure out equivalency for overlapping parts of their guidance and the new standard.

Charles Dumaresq, MAC’s vice-president of science and environmental management notes the tailings component of MAC’s Toward Sustainable Mining Program (its Tailings Guide and its Operation, Maintenance and Surveillance Guide) in some ways goes beyond the requirements of the Global Standard.

“With what we already have and our requirements in our guidance, I think our members will be very well posititioned to cover off all those aspects of the Standard that are focused on guidance and assigning responsibility at a senior level,” Dumaresq says. “Those kinds of things have been themes in TSM and the tailings component of it right from the beginning when the first tailings guide came out in 1998.”

However, some of the engineering aspects that are covered in the Global Standard are outside the scope of MAC’s guidance (in Canada, that side is covered by the Canadian Dam Association), so some work will be required to figure out that piece in complying with the Standard, for MAC members who choose to do so.

Investor engagement

Beyond the establishment of international standards and their implementation, the biggest change of all since Brumadinho has been in investor awareness, engagement and interest.

Dumaresq says investors and insurers are both asking miners for much more detail about their tailings management practices.

“They’re asking companies questions that they’ve never or rarely gotten before – and now these questions are becoming the norm when having discussions about tailings from a risk management perspective in the context of insurance or from an investment perspective,” Dumaresq says.

The trend towards greater investor engagement doesn’t end with tailings – as evidenced by investors pushing miners toward net zero carbon emissions commitments – and is only going to intensify going forward.

From Matthews’ perspective, the tailings issue is a systemic risk that hasn’t been addressed on a sector-wide level.

“Yes, there’s good practice, but it’s yet another issue where the sector hasn’t addressed a systemic problem,” he says. “As a result, some investors have potentially walked away from the sector because it’s too complicated and too risky.”

But the mining sector’s importance to the transition to a low-carbon economy has meant that investors such as the Church of England can’t walk away, and instead have committed to engagement in order to press for miners to address those sector-wide, systemic risks.

“That creates a basis for a very different relationship with your investors in the mining sector going forward where we need to take a much more long-term look at systemic risks together, codify best practice, standardize disclosure requirements – and really drive that performance to those standards,” Matthews says. “Investors can really line up behind that and I think that is ultimately where this will go beyond tailings.”

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