July 12, 2015

Tailings Stewardship - Genuine Corporate Responsibility

Matt Fuller, CPG, Tierra Group International, Ltd.

ABSTRACT: Tailings stewardship has come to the forefront of the mining industry’s attention following the Mt. Polley tailings dam breach in British Columbia, Canada. Recognizing the negative impacts a tailings dam failure has on market capitalization, combined with regulatory changes in Canada, at least one major mining company has begun implementing additional tailings dam safety assurances. Tailings Stewardship is a management strategy that ensures best practices are implemented to properly design, construct, operate, maintain, monitor, and ultimately close tailings storage facilities. This article describes a stalwart tailings stewardship strategy and implementation plan developed by a major Canadian mining company and their Tailings Stewardship Team. The true cost of a tailings dam failure, or upset condition, is difficult to quantify due to long-term post-failure implications. Substantive tailings dam upset conditions or failures will undoubtedly suspend tailings operations, causing mine production to cease (unless the mine has another tailings storage alternative available to them, which is not usual). Suspending mine production interrupts the mine’s revenue stream and cash flow, however, ongoing sustaining costs during mine shutdown continue. Other direct costs including dam repairs or replacement, and environmental cleanup or restoration, can also be incurred. Potential indirect costs include fines, litigating and settling class-action lawsuit(s), or in some instances defending criminal charges. Direct and indirect costs associated with a tailings dam failure can total tens of millions of dollars. Without question the single most significant economic impact to a mining company is lost market capital due to shareholder stock selloffs. Mining is highly dependent on capital investment. Most mining companies rely heavily on securities markets to raise the hundreds of millions of dollars necessary to develop their capital projects; principally because they provide a good financial return, on environmentally responsible investments. As such, investor confidence, whether institutional or individual, is critical to a mining company’s long-term success, and growth. Download Paper: Elko Expo 20150525 final

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